Osman sagar was created by damming the Musi River in 1920, for providing drinking water source for Hyderabad, and also saving the city from floods, on the lines of which Hyderabad suffered in 1908. It was during the reign of The Last Nizam of Hyderabad, Osman Ali Khan, hence the name. A princely guest house called Sagar Mahal, overlooking the lake, now a heritage building, was built as a summer resort of the last Nizam. It is located on the banks and has the best view of the lake. Andhra Pradesh Tourism Department, currently, runs the place as a resort. The breeze of the lake is very pleasant, and has been popular with the locals since The Nizam's time.(Wikipedia)