The town was founded in 1789 by the Russian Governor General of Novorossiya, Prince Grigori Potemkin, initially as a shipyard called simply a New Shipyard on the Ingul river. Kniaz Potemkin signed an order to construct a shipyard on August 27, 1789, which is considered to be the city's birth date. The shipyard was to undertake the repair of naval ships in the Russo-Turkish War (1787–1792). Later Potemkin ordered the shipyard to be named Nikolaev to commemorate the date when Ochakov fell to the Russian troops under his command on December 6, 1788, close to the day of Saint Nicholas (Nikolay) December 19, in the Russian Orthodox Church calendar.

The history of the city has always been closely connected to ship building. Captain Georgy Brusilov of the ill-fated Arctic ship St Anna was born in Mykolaiv in 1884.

The Lubavicher Rebbe Rabbi Menachem Mendel Schneerson was born in Mykolaiv in 1902. Mykolaiv was occupied by Romania between 1941-1944.

Nikolayev is a modern city in appearance, laid out on a gridiron pattern of broad streets. Nikolayev city is an important cultural center of Ukraine. The city has ship-building and teacher-training institutes.

Nikolayev city architecture features are various cathedrals and churches, Black Sea fleet Observatory, Yacht-Club, Vladimir Shuhov hyperboloid water tower and plenty of others.