The canal was first proposed by Hugh Montgomerie, 12th Earl of Eglinton in 1791. He wanted to connect the booming industrial towns of Glasgow, Paisley and Johnstone to his new deep sea port at Ardrossan and his Ayrshire coal fields. His fellow shareholders included William Dixon of Govan who wished to export coal from his Govan colliery. The Earl had spent £100,000 on creating Ardrossan's harbour and intended to make it the principal port for Glasgow. Interest was also shown by Lord Montgomerie and William Houston who would also benefit from the canal passing through their lands and connecting their own coal and iron mines to nearby industrial consumers. In this pre McAdam period, the roads around Lanarkshire, Renfrewshire and Ayrshire were not suitable for heavily loaded traffic. The other alternative route, up the Clyde river estuary to Glasgow, was not navigable by large ships as the river was too shallow.
Engineers John Rennie, Thomas Telford and John Ainslie were employed to design the canal, survey a route, and estimate the costs. The original design was in three parts. The first section would be a contour canal of about 11 miles (18 km) in length. Following the land, a contour canal is entirely level and requires no locks or lifts making navigation quick and easy. Contour canals require only a small water supply since no water is lost to locks, but this method of construction would make the canal longer than it need have been. The second section would see a series of 8 locks lift the level up to a summit near Johnstone. The third and last section would use 13 locks to bring the canal down to sea level at Ardrossan Harbour. When complete the canal have been just shy of 33 miles (53 km) long. The dimensions of the cutting were to be 30 feet (9.1 m) broad at the top and at bottom, 18 feet (5.5 m). The depth was to be 4 feet 6 inches.
The Company of the proprietors of the Glasgow, Paisley and Ardrossan canal was incorporated by an Act of Parliament which received Royal assent from George III on the 20 June 1806. This bill allowed for funding to be raised by the sale of two thousand eight hundred shares of £50 each, a total of £140,000, of which the proprietors, the Earl of Eglinton, Lord Montgomerie and Lady Jane Montgomerie subscribed £30,000.
Construction began in 1807 and the first boat, the passenger boat, The Countess of Eglinton, was launched on the 31 October 1810. The passenger service initially only ran between Paisley and Johnstone. The full length to Glasgow's Port Eglinton was complete sometime in 1811. The original plans to extend the canal to Ardrossan were soon suspended. The costs of completing the first 11-mile (18 km) contour canal had consumed all the available funds – the initial estimates having been grossly understated. Further estimates indicated that £300,000 additional funding would need to be secured to complete the project. Hugh Montgomerie, 12th Earl of Eglinton, had already spent £100,000 on a separate project to build a sea harbour at Ardrossan, at the proposed terminus of the canal. The Harbour project would eventually be competed by his grandson, the 13th Earl, for a total cost of £200,000. Attempts were made to raise extra funds but other major investors, such as William Houston, were reluctant to invest as the canal already linked his own coal and iron mines, around Johnstone, to Glasgow and Paisley.