The barrage at Melk on the Danube was recorded in the phased plan of Österreichische Donaukraftwerke AG (DoKW) as early as 1955, but at a site some 3.4 km to the east of where it stands today. However, soil analysis carried out within the framework of the construction of the Danube bridge at Melk revealed an unfavourable substrate of tertiary sand, which would have rendered a secure power plant foundation - with change of construction pit and open dewatering - too time-consuming and thus too expensive. Thus, in the interim report of 1972 for the Ybbs – Vienna framework plan, DoKW had already specified the plant at river kilometre 2,037.80.
The main structure of the power plant was completed from 1 March 1979 in flat design in a single, approx.138 hectare construction pit on the south bank of the Danube. It was necessary to create a new riverbed of approx. four kilometres in length, whilst the regular shipping traffic and the water supply remained in the old, northern riverbed. It was necessary to deepen both the headwater and tailwater areas, but this only involved the dredging of floodplain sand and light gravel. The total excavation during the construction amounted to more than 20 million m³.
Following the commissioning of the sluices at the end of September 1981, and the sealing off of the Danube from 6 until October, it was possible to start with the first stage of the reservoir during the low tide period, which ultimately led to the reservoir reaching its full capacity on 24 February 1982. The first hydroelectric generating set started operations on 28 January 1981 and, with the exception of the energy supply of unit 9, construction works were completed on 1 March 1982.
In contrast to all Danube stages erected to date, an open-air substation was dispensed with at Melk. The electricity produced is diverted to the control room of Bergern transformer station of Austrian Power Grid AG (APG) via an underground oil-filled cable.
The impounding of the Danube above Melk resulted in the flooding of several shallow areas dangerous for shipping, such as the Kachlet stretch at Säusenstein. The construction project also envisaged large-scale dam structures on the north and south banks, incorporating the refilled Erlauf estuary. It was not necessary to change the position of River Melk estuary, since it anyway only flowed into the tailwater of the power plant.
From 2006 until 2007, a fish ladder was erected to the north of the power plant through the connection to the headwater with the abandoned channel.