With the Vetch Field, St Helen's and The Gnoll no longer being up-to-date venues to play at, and both the Swans and the Ospreys not having the necessary capital to invest into a new stadium, Swansea council and a developer-led consortia submitted a proposal for a sustainable 'bowl' venue for 20,520 seats on a site to the west of the River Tawe on the site of the Morfa Stadium, an athletics stadium owned by the City and County of Swansea council. It was funded by a 355,000 ft retail park on land to the east of the river. The final value of the development being in excess of £50m.
The first capacity crowd recorded at Liberty Stadium was on the 1 November 2006 when The Ospreys beat Australia 24–16. The stadium has hosted multiple Wales football internationals, listed below.
Seating at Liberty Stadium is often sold out during Swansea City football matches. Swansea City have expressed a desire to have the capacity of the stadium increased and have held talks with Swansea Council during the 2011/2012 season for the future expansion of the Liberty stadium which would be completed in a number of phases beginning with expansion or redevelopment of the east stand. Plans for a new McDonald's fast food restaurant to be opened near the stadium threw expansion plans into doubt. However, the planning application was withdrawn.
In December 2013, it was reported by BBC News that the European Commission had requested details of the funding of the stadium, as part of a wider inquiry into state aid for sports clubs.
During its construction, a variety of names were suggested for it: most commonly used was "White Rock" stadium (after the copper works of the same name which existed on the site historically). However "White Rock" was only used as a temporary name during its construction and when work was finished, the name was dropped and the stadium owners began looking for sponsors for the stadium. While sponsors were being searched for, it was called "New Stadium Swansea". On 18 October 2005, Swansea-based developers Liberty Properties Plc won the naming rights to call it "Liberty Stadium". In UEFA matches, it is called Swansea Stadium due to UEFA regulations on sponsorship.