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Some recent studies have suggested that the city is no longer sinking, but this is not yet certain; therefore, a state of alert has not been revoked. In May 2003, Silvio Berlusconi, the Italian Prime Minister, inaugurated the "Moses" project, which will lay a series of 79 inflatable pontoons across the sea bed at the three entrances to the lagoon. When tides are predicted to rise above 110 centimetres, the pontoons will be filled with air and block the incoming water from the Adriatic sea. This challenging engineering work is due to be completed by 2011.

The city was founded as a result of the influx of refugees into the marshes of the Po estuary following the invasion of northern Italy by the Lombards in 568. In the mid-8th century, the Venetians resisted the empire-building efforts of Pepin III and remained subject to the Byzantine Empire, at least theoretically. As the community continued to develop and as Byzantine power waned, however, an increasingly anti-Eastern character emerged, leading to the growth of autonomy and eventual independence. Venice was a city state (an Italian thalassocracy or Repubblica Marinara, the other three being Genoa, Pisa, and Amalfi). Its strategic position at head of the Adriatic made Venetian naval and commercial power almost invulnerable.

Venice became part of the Austrian-held Kingdom of Lombardy-Venetia when Napoleon signed the Treaty of Campo Formio on October 12 1797. The Austrians took control of the city on January 18, 1798. It was taken from Austria by the Treaty of Pressburg in 1805 and became part of Napoleon's Kingdom of Italy, but was returned to Austria following Napoleon's defeat in 1814. In 1866, along with the rest of Venetia, Venice became part of Italy. After 1797, the city fell into a serious decline, with many of the old palaces and other buildings abandoned and falling into disrepair, although the Lido became a popular beach resort in the late 19th century.

In the early fifteenth century, the Venetians also began to expand in Italy, as a response to the threatening expansion of Giangaleazzo Visconti, Duke of Milan. By 1410, Venice had taken over most of Venetia, including such important cities as Verona and Padua. The Venetians also came into conflict with the Popes over control of the Romagna. This led in 1508 to the League of Cambrai against Venice, in which the Pope, the King of France, the Holy Roman Emperor, and the King of Aragon came together to despoil the republic. Although the French were victorious at Agnadello in 1509, the coalition soon fell out among themselves, and Venice found itself without serious territorial loss.

The Grand Canal is Venice's largest waterway. It forms one of the major water-traffic corridors in the city.

At the same time, however, the expansion of the Ottoman Turks in the Balkans and the Eastern Mediterranean proved threatening to the Venetians. In 1570, the Turks invaded Cyprus, which was conquered by 1571 despite the victory of the Holy League (including significant Venetian forces) at Lepanto later that year. The Venetians soon after made peace, confirming the loss of Cyprus. In the seventeenth century, Crete too was lost, after a long conflict.

The Rialto Bridge (Italian: Ponte di Rialto) spans the Grand Canal in Venice. It is the oldest bridge across the canal and probably the most famous in the city.

The development and importance of the Rialto market on the eastern bank increased traffic on the floating bridge. So it was replaced around 1250 by a wooden bridge. This structure had two inclined ramps meeting at a movable central section, that could be raised to allow the passage of tall ships. The connection with the market eventually led to a change of name for the bridge. During the first half of the 15th century two rows of shops were built along the sides of the bridge. The rents brought an income to the State Treasury, which helped maintain the bridge.

After a popular revolutions on 22 March 1848 (The Five Days of Milan), the Austrians fleed from Milan, which become the capital city of the Governo Provvisorio della Lombardia (Lombardy Temporary Government). The next day, also Venice arose against the Austrians, forming the Governo Provvisorio di Venezia (Venice Temporary Government). The Austrians, after defeating the Sardininan troops in Custoza (24-25 July 1848), entered in Milan (6 August) and Venice (24 August 1849), restoring Austrian rule.