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Game hunters and trappers frequently went through the area that is now Austell on their way to the area’s salt licks. These early visitors claimed the area’s waters had medicinal properties. It soon became a destination for therapeutic healing, leading to the founding of a town known as Salt Springs. As immigration increased and demand for land near the spring grew, G. O. Mozely donated and subdivided 40 acres (16 ha) of his land, enhancing the loose settlement with a street plan. Later, the spring was renamed Lithia Springs due to the water containing lithium carbonate, and the neighboring city of Lithia Springs was founded in 1882. In 1888, the lithia spring water was bottled and sold under the commercial name Bowden Lithia Spring Water. The historic lithia spring water is still bottled and sold under the name brand Lithia Spring Water. The Georgia Pacific Railway chose the town of Austell to be a station depot, being the dividing point for the major Birmingham and Chattanooga railway lines.

Austell was incorporated in 1885. The town is named for General Alfred Austell (1814-1881), in recognition of his efforts to bring major railways to the South. General Austell also founded the Atlanta National Bank (later renamed First Atlanta), which eventually became part of Wachovia and later Wells Fargo through various mergers and acquisitions. General Austell is buried in an elaborate Gothic Revival-style mausoleum at the highest point in Atlanta’s Oakland Cemetery.

In 2009, Sweetwater Creek flooded, destroying many homes and businesses in the Austell area.