The stadium was built as a replacement for FC Porto's old ground, Estádio das Antas (Antas Stadium), and as a venue for EURO 2004. It was completed in 2003, some months after what was expected, since in February 2001 Porto mayor Rui Rio changed the estate distribution, criticizing the plan because it included high-scale housing and shopping for the area and forcing the chairman of FC Porto Jorge Nuno Pinto da Costa to halt all building operations, which were only resumed after a consensus was agreed.
As of today, the stadium, housing and shopping areas have been built, but the city has apparently let go of its interest in building the school and public gardens which were part of the plan, bringing up old arguments about the mayor's decision in 2001.
As requested by UEFA, the old stadium was demolished and the space used for the media during EURO 2004. In the following months, construction of the buildings that will form the new urban settlement called Cidade das Antas (City of Antas) progressively started.
Designed by Manuel Salgado and built by the Grupo Amorim, it cost €97,755,318, of which €18,430,956 was subsiized by Portuguese taxpayers. To help underwrite costs, each stand carries one or two sponsor names, edp for the South (Sul) end, tmn and Sapo adsl in the East (Nascente) stand, PT and TV Cabo for the West (Poente) stand and finally Coca-Cola in the North (Norte) Stand. Away fans are placed in the left corner of the North stand, while FC Porto supporter groups (SuperDragões and Colectivo Ultras 95) are one on each top, although initially both groups were in the South stand.
The stadium's name is derived from the presence of a dragon on the crest of FC Porto, which is composed of an old football under the old crest of the City of Porto. It is also the nickname of FC Porto fans. Other alternatives were considered, such as Estádio das Antas (officially, unlike the former stadium) or named after Artur de Sousa Pinga, José Maria Pedroto (former players and managers) or Pinto da Costa (running president for over 20 years).
The stadium was inaugurated on 16 November 2003 with a match against FC Barcelona. FC Porto won 2-0 with goals by Derlei and Hugo Almeida. However, due to severe turf problems, FC Porto was forced to play in the old Estádio das Antas, until the turf was replanted by mid February 2004.
The stadium further cemented its reputation as an all-round sports and entertainment venue when it hosted the Portuguese leg of The Rolling Stones 2006 world tour, fighting off competition from stadiums in Lisbon. This represents something of a coup for the city of Porto over the capital.
One of the projects for the new Northern Irish national stadium in Maze (near Lisburn, built on the grounds of the disabled Maze Prison) is said to be modelled after the Dragão. Initially planned for 30,000 seats, in order to keep up with the original plans, it went through a 12,000 seat increase. The additional costs (around 85 million pounds) are believed to be supported by possible internationals and UEFA competition finals by the local authorities. 1