Agarak was founded in 1949 as a labour settlement to accommodate the workers at the nearby copper-molybdenum combine. In 1954, it gained the status of an urban-type settlement. During the first days of its foundation, the settlement was mainly home to 2-storied residential buildings. Later, with the expansion of the copper-molybdenum combine by the end of the 1970s, 3, 4 and 5-storied buildings were also constructed in the settlement. The workers along with their families were brought to Agarak from the nearby villages, turning Agarak into an important industrial centre at the southern region of the Armenian Soviet Socialist Republic.