Built in the 16th century, the lake was named to express the gratitude of Ibrahim Quli Qutub Shah to Hussain Shah Wali who helped him to recover from illness. It is a sprawling artificial lake that holds water perennially, built during the reign of Ibrahim Qutub Shah, across a tributary of the river Musi in 1562. Linking the twin cities of Hyderabad and Secunderabad, the lake and its environs have several parks and scenic spots. The broad road on the tank bund is lined with lawns, and statues of 33 famous personalities of the state (which are now partially destroyed) stand along the bund. The lake was notorious as a suicide location. This has reduced in the last few decades, possibly due to the worsening water quality.
The beautiful, well-laid-out Lumbini Park, part of the Buddha Purnima project, has a musical fountain. The lake is encompassed on one side by the Lumbini amusement park. There is the enchanting Birla Mandir hewn on a hillock nearby. Standing on the Tank Bund at night, one is awe-struck to see the glimmering row of lights outlining the lake that look like "a diamond studded necklace". This is the necklace road designed to enhance the beauty of Hussain Sagar.