Otaru Port has developed as the gateway for Hokkaido's development. At that time, large ships were anchored offshore, and cargo was unloaded using lighters (flatboats), but the volume of cargo handled increased, and the necessity arose to perform transportation work efficiently. In order to lengthen the distance lighters could berth, what was created by reclaiming the sea surface is the "Otaru Canal."

The Otaru Canal was completed in Taisho 12 (1923), and because it was not a canal dug inland but was built by reclaiming the offshore area of the coast, its characteristic is that it is gently curved rather than straight. However, as times changed and after the war, due to the development of the port's wharf (futou) quay, its mission came to an end. In Showa 61 (1986), after a controversy spanning over ten years regarding its reclamation, a part of the canal was reclaimed, half of its width became a road, and it was reborn into its current form with a promenade and city gardens developed.

The total length of the canal is 1140m, and its width is 20m for the part along the Prefectural Road Rinko Line, while the northern part (commonly known as: North Canal) remains 40m as it was originally. 63 gas lamps are installed on the promenade, and the group of stone warehouses along the canal remain as they were at that time and are being reused as restaurants and so on. At dusk, as the gas lamps are lit, the group of stone warehouses are lit up, creating an atmosphere different from that of the daytime.