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The island is first mentioned in chronicles of 421 when people from Padua and Este fled there to escape the barbarian invasions. In the 9th century, the island's population began to grow, and in the following centuries, its importance grew steadily, until it was governed by a dedicated Podestà. In 1379 Venice came under attack from the Genoan fleet; the people of Poveglia were moved to the Giudecca.
The island remained uninhabited in the subsequent centuries; in 1527 the doge offered the island to the Camaldolese monks, who refused the offer. From 1645 on, the Venetian government built five octagonal forts to protect and control the entrances to the lagoon. The Poveglia octagon is one of four that still survives.
In 1776 the island came under the jurisdiction of the Magistrato alla Sanità (Public Health Office), and became a checkpoint for all goods and people coming to and going from Venice by ship. In 1793, there were several cases of the plague on two ships, and consequently, the island was transformed into a temporary confinement station for the ill (lazaretto); this role became permanent in 1805, under the rule of Napoleon Bonaparte, who also had the old church of San Vitale destroyed; the old bell-tower was converted into a lighthouse. The lazaretto was closed in 1814.
The island was used as a quarantine station from 1793 until 1814.  In 1922 the existing buildings were converted into an asylum for the mentally ill and later used as a nursing home/long-term care facility until its closure in 1968. Afterward, the island was briefly used for agriculture and then completely abandoned.
In 2014 the Italian state auctioned a 99-year lease of Poveglia, which would remain state property, to raise revenue, hoping that the buyer would redevelop the hospital into a luxury hotel. The highest bid was from Italian businessman Luigi Brugnaro, (€513,000); he planned to invest €20 million euros in a restoration plan. The lease did not proceed because his project was judged not to meet all the conditions. Other sources suggested that the deal was annulled because the bid was too low. Brugnaro initially fought the cancellation of the lease, but after he became mayor of Venice, he renounced any intentions to the island.
In 2015, a private group, Poveglia per Tutti, was hoping to raise €25–30 million for a new plan to include "a public park, a marina, a restaurant, a hostel and a study centre" according to The Telegraph. As of mid-2019, however, the island still sat vacant.
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