The canal was commissioned in 1791 by local landowners and businessmen and built between 1791 and 1808, during the Golden Age of canal building, at a cost of £127,700 (£7.87 million today).Originally designed for narrow gauge boats, during its construction the canal was altered into a broad gauge canal to allow an ultimately unrealised connection with the Leeds and Liverpool Canal. The canal company later converted into a railway company and built a railway line close to the canal's path, which required modifications to the Salford arm of the canal.
The majority of the freight carried was coal from local collieries but, as the mines reached the end of their working lives sections of the canal fell into disuse and disrepair and it was officially abandoned in 1961. In 1987 a society was formed with the aim of restoring the canal for leisure use and, in 2006, restoration began in the area around the junction with the River Irwell in Salford. The canal is currently navigable as far as East Ordsall Lane, in Salford.