The Sherman Creek Hatchery is one of three kokanee salmon and rainbow trout facilities provided to partially mitigate for the loss of anadromous fish habitat in Northeastern Washington.  The purpose of these hatcheries is to reestablish fish populations in the upper Columbia River Basin following construction of the Grand Coulee Dam in 1941. The Sherman Creek facility began operations in 1992, and is part of a program funded by the Bonneville Power Administration (BPA).

In the mid 1980's an extensive feasibility study on restoring and enhancing the Lake Roosevelt Fisheries was conducted, after which, construction of the Sherman Creek Hatchery, and Spokane Tribal Hatchery (STH), were approved by the Northwest Power Planning Council.  The study recommended that the two facilities be managed by the Washington Department of Fish and Wildlife (WDFW) and the Spokane Tribe of Indians.  The Ford Hatchery (built in 1941) was included in the September, 1995 Fish and Wildlife plan to also provide mitigation .  

Operated by WDFW, the Sherman Creek Hatchery is located at a northern tributary in Lake Roosevelt.  The Spokane Tribal Hatchery is located at Galbraith Springs on the Spokane Indian Reservation.  The Ford Hatchery is located at the eastern of edge of the Spokane Indian Reservation, on the upper unit of the Chamokane Valley Aquifer system.  The operation of these facilities, along with the Lake Roosevelt Volunteer Net Pen Program, complement each other in the annual rearing and release goal of 500,000 yearling kokanee salmon, 700,000 fingerling kokanee salmon, 2,500,000 kokanee salmon fry and 600,000 yearling rainbow