Construction on an 8 line light metro rail network was scheduled to begin construction in 2003. In 2009, plans changed. The Hangzhou Municipal Government and Hong Kong's MTR signed an agreement where MTR would build and operate the city's first subway.

Civil construction works for the project commenced in March 2007. A total of 30 stations, running from south to north of Hangzhou city, to other second cities, namely Xiasha (下沙), Linping (臨平) and Jiangnan (江南).

Hangzhou's first line, the 48 km  30 station Hangzhou Metro Line 1, opened in November 2012. It consists of 41 km of underground track and 7 km of at-grade and elevated sections. Line 2 opened two years later (18.3 km, 13 stations, all underground), and the first section of Line 4, comprising 10 stations over 9.6 km, opened in February 2015. Last to open was a 5.7 km extension to Line 1 in November 2015. The system currently has 53 stations covering 81.6 km.

The system will eventually comprise 8 lines covering 278 km.