The building stands on the former sites of the Baltic Exchange (24-28 St Mary Axe), which was the headquarters of a global marketplace for ship sales and shipping information, and the Chamber of Shipping (30-32 St Mary Axe). On 10 April 1992, the Provisional IRA detonated a bomb close to the Exchange, causing extensive damage to the historic building and neighbouring structures.
The United Kingdom government's statutory adviser on the historic environment, English Heritage, and the City of London's governing body, the City of London Corporation, were keen that any redevelopment must restore the Baltic Exchange's old façade onto St Mary Axe. The Exchange Hall was a celebrated fixture of the ship trading market.
After English Heritage later discovered the damage was far more severe than initially thought, they stopped insisting on full restoration, albeit over the objections of the architectural conservationists who favoured reconstruction. The Baltic Exchange and the Chamber of Shipping sold the land to Trafalgar House in 1995. Most of the remaining structures on Baltic Exchange site were then carefully dismantled, the interior of Exchange Hall and the façade were preserved, hoping for a reconstruction of the building in the future. The salvaged material was eventually sold for £800,000 and moved to Tallinn, Estonia, where it awaits reconstruction as the centrepiece of the city's commercial sector.
In 1996, Trafalgar House submitted plans for the Millennium Tower, a 386-metre (1,266 ft) building with more than 140,000 m2 (1,500,000 sq ft) of office space, apartments, shops, restaurants and gardens. This plan was dropped after objections for being totally out-of-scale with the City of London and anticipated disruption to flight paths for both London City and London Heathrow airports; the revised plan for a lower tower was accepted.
The tower's topmost panoramic dome, known as the "lens", recalls the iconic glass dome that covered part of the ground floor of the Baltic Exchange and much of which is now displayed at the National Maritime Museum.
The Gherkin nickname was applied to the current building at least as long ago as 1999, referring to that plan's highly unorthodox layout and appearance.
On 23 August 2000, Deputy Prime Minister John Prescott granted planning permission to construct a building much larger than the old Exchange on the site. The site was special because it needed development, was not on any of the "sight lines" (planning guidance requires that new buildings do not obstruct or detract from the view of St Paul's dome when viewed from a number of locations around London), and it had housed the Baltic Exchange.
The plan for the site was to reconstruct the Baltic Exchange. GMW Architects proposed a new rectangular building surrounding a restored exchange: the square shape would have the type of large floor plan that banks liked. Eventually, the planners realised that the exchange was not recoverable, forcing them to relax their building constraints; they hinted that an "architecturally significant" building might obtain a favourable reception from city authorities. This gave the architect a free hand in the design; it eliminated the restrictive demands for a large, capital-efficient, money-making building, whose design was per the client's desire.
Swiss Re's low level plan met the planning authority's desire to maintain London's traditional streetscape with its relatively narrow streets. The mass of the Swiss Re tower was not too imposing. Like Barclays Bank's former City headquarters in Lombard Street, the idea was that the passer-by in neighbouring streets would be nearly oblivious to the tower's existence until directly underneath it.