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The 16 m deep lake was created in the mid 16th century by building a bund linking Hyderabad and Secunderabad and was named to mark the gratitude of Ibrahim Quli Qutb Shah to Hussain Shah Wali who helped him recover from his illness. The bund is a favourite promenade for the city dwellers. At the far end of the lake is the Nizamia Observatory.
The 17.5 m high, 350 ton granite statue of Buddha was erected in the lake after years of successive disasters and finally inaugurated by the Dalai Lama in 1993. The tank, fed by streams originating from the Musi river, supplies drinking water to Hyderabad.
