The seed of IIT Madras was sown during Pt.Jawahar Lal Nehru's visit to Federal Republic of Germany in 1956. The federal government offered assistance to open a technological institute in India that led to Indo-German agreement in Bonn in 1958, wherein figured the Indian Institute of Technology Madras. The first Indo-German Agreement provided for the services of German professors and 5 foremen, training facilities for 20 Indian faculty members and the supply of scientific and technical equipment for the establishment of the Central Workshop and 20 laboratories at IIT Madras.

The Indian Institute of Technology Madras was formally inaugurated by Prof.Humayun Kabir, the Union Minister for Scientific and Cultural Affairs in 1959. Dr.A.Lakshmanaswamy assumed office as the first Chairman of the Board of Governors and Dr.B.Sengupto as the first Director of the Institute.The Institute was declared as an 'Institute of National Importance' by the Parliament of India in 1961.

The visit of President of Germany, Dr.Heinrich Luke in 1962 added new dimension to the IIT Madras in the form of Indo German technical assistant programme and Indo German relationship.In 1976 an agreement with the government of France was signed for collaboration and assistance in establishing the Aeronautics Department of the institute.

The institute has conferred honorary degrees of Doctor of Science and Doctor of Technology (honoris causa) to eminent personalities like Nobel Laureate (Physics) Dr.John Bardeen (1973), former Minister for Foreign Affairs (FRG) Mr.Hans Dietrich Genscher (1973) and former Chairman, Atomic Energy Commission, Dr.Raja Ramanna (1983) among others.Prominent in the academic calendar of the Institute is the Institute Convocation Day, the convocation address being delivered usually by the President, Vice-President or Prime Minister of India.President Shri Sarvepalli Radhakrishnan addressed the first convocation of the Institute.