Gimli developed after a series of natural disasters forced Icelanders to leave their island between 1874 and 1876. It became the mother colony of several North American Icelandic settlements. Some 200 people arrived near Gimli in October 1875 to settle New Iceland, a tract of land outside the boundaries of Manitoba reserved for their use by the Dominion government. They named their settlement after the Hall of Gimli, known as "paradise" in Norse mythology.
The Post office opened on May 1, 1886.
The current population is 1916.

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