The first library in Tracy was established in 1880. It was located in City Hall until a fire destroyed the building in 1912. It relocated to the new high school in 1914, and remained there until the 1920s.
In the 1930s, the American Legion Auxiliary took an interest in starting a new library, and council rooms in the basement of the Masonic Building were secured for this purpose. The new library opened in January of 1936, with Nona Finnigan as librarian. After its establishment, the Auxiliary presented the library to the city, to be municipally owned and operated.
The library has been in its current location since 2011. The building was purchased and remodeled thanks to generous donations from Clarice Finnigan (daughter of former Tracy Librarian Nona Finnigan), and the former Tracy Nursing Home. In 2014, lifts were added with the help of a grant from the Minnesota Department of Education. In 2019, a meeting room was added to the basement level, thanks to a donation from Marjorie Hyland and a grant from the Minnesota Department of Education.