Annual counts of salmon spawning in the American River by the California Department of Fish and Game (CDFG) provided justification for construction of this hatchery.

In cooperation with the CDFG and U.S. Fish and Wildlife Service, the U.S. Bureau of Reclamation designed and built the hatchery, and currently pays the CDFG to operate and maintain it.

The presence of this hatchery is an example of the multiple-use concept of water resource development. The primary purposes of the Folsom Dam project, of which Nimbus is an integral part, are flood control, municipal water supply, power generation and irrigation. In developing the American River for these important purposes, planners included Nimbus Hatchery to mitigate for project impacts on salmon and steelhead populations.