There was no channel connecting Natori River and Nanakita River until the Meiji era. At the start of the Meiji era, the merchants of Sendai realized that they needed a canal so they provided the funds necessary to hire people of the samurai caste to excavate the New Channel. Sendai-Han (the samurai clan of Sendai) were defeated during the Civil War at the start of the Meiji era and did not have the funds for excavation. Following completion of this new channel, Kibiki Channel, New Channel and Ofuna-iri Channel became concatenated, together forming a canal extending 35 km. At the New Channel, a toll was collected from boats passing through.
The Meiji Government promoted the construction of three large modern ports as one part of an ambitious modernization policy. One of these ports was Nobiru Port situated at the mouth of the Naruse River in East Matsushima city. Construction began in Meiji year 12 (1879). Related to this, one year before, in Meiji year 11 (1878), excavation of the Kitakami canal was begun to connect the new port with Ishinomaki. Also, the Tōna Canal was excavated to connect the port to Matsushima Bay. Work on the Tōna Canal began in Meiji year 16 (1883). These two canals were completed in Maiji year 17 (1884). However, that same year, while Nobiru Port was still under construction, the area was struck by a typhoon and part of the port which had been completed was badly damaged. The government doubted the effectiveness of continuing with the construction and so abandoned the Nobiru Port project. The remnants of the harbour construction were damaged by the Great East Japan Earthquake but some of them can still be seen.
The north terminal of the Kitakami Canal is at the Old Kitakami River, at which the Ishii Lock Gate was constructed to allow adjustment of the water levels between the river and the canal, and is still in its original form today. It was damaged during the disaster but it is being restored.
In Meiji year 20 (1888), a railway was completed from Ueno, through Sendai, to Shiogama so the initial role of the Teizan Canal was finished. After that, the Teizan Canal was used as a waterway in each local area along it and many boats passed along it until the early years of the Shōwa period (1926-1988).