The agricultural village of Batu Kawan had been in existence since the 19th century, when the area was home to sugar, coconut and rubber estates.
In particular, sugar plantations in the area had been run by Chinese settlers as early as 1796.
Granite was extracted from the area as well; the granite was then sent across the Penang Strait to George Town on tongkangs departing from the Batu Musang Jetty.

In the 1960s, the aforementioned plantations were cleared to make way for larger palm oil estates.

In 1990, the Penang Development Corporation (PDC), a statutory body of the Penang state government, acquired 6,000 hectares (60 km²) of land in Batu Kawan.
The Penang State Stadium, completed in 2000, was one of the first development projects undertaken by the PDC, followed by the Batu Kawan Industrial Park and the Penang Science Park.

In 2008, the Malaysian federal government commenced the construction of the Second Penang Bridge, which links Batu Kawan with Batu Maung on Penang Island.
The completion of the bridge in 2014 proved to be a catalyst to Batu Kawan's contemporary development, with the town being touted as "Penang's third satellite township" after Bayan Baru on the island and Seberang Jaya in Central Seberang Perai.
In 2012, the PDC launched the Bandar Cassia residential development, which is modelled after Singapore's Housing and Development Board schemes.
This was soon followed by larger property developments, such as Utropolis and Aspen Vision City.

In 2015, the Penang state government declared the launch of a new development corridor within the South Seberang Perai District, which encompasses Batu Kawan and Nibong Tebal.
The agricultural village of Batu Kawan had been in existence since the 19th century, when the area was home to sugar, coconut and rubber estates. In particular, sugar plantations in the area had been run by Chinese settlers as early as 1796. Granite was extracted from the area as well; the granite was then sent across the Penang Strait to George Town on tongkangs departing from the Batu Musang Jetty.
In the 1960s, the aforementioned plantations were cleared to make way for larger palm oil estates.
In 1990, the Penang Development Corporation (PDC), a statutory body of the Penang state government, acquired 6,000 hectares (60 km²) of land in Batu Kawan. The Penang State Stadium, completed in 2000, was one of the first development projects undertaken by the PDC, followed by the Batu Kawan Industrial Park and the Penang Science Park.
In 2008, the Malaysian federal government commenced the construction of the Second Penang Bridge, which links Batu Kawan with Batu Maung on Penang Island. The completion of the bridge in 2014 proved to be a catalyst to Batu Kawan's contemporary development, with the town being touted as "Penang's third satellite township" after Bayan Baru on the island and Seberang Jaya in Central Seberang Perai. In 2012, the PDC launched the Bandar Cassia residential development, which is modelled after Singapore's Housing and Development Board schemes. This was soon followed by larger property developments, such as Utropolis and Aspen Vision City.
In 2015, the Penang state government declared the launch of a new development corridor within the South Seberang Perai District, which encompasses Batu Kawan and Nibong Tebal.
Batu Kawan