SMS Ägir was the second and final member of the Odin class of coastal defense ships (Küstenpanzerschiffe) built for the Imperial German Navy. She had one sister ship, Odin. Ägir was named for the norse god, and was built by the Kaiserliche Werft (Imperial Shipyard) in Danzig between 1893 and 1896. She was armed with a main battery of three 24-centimeter (9.4 in) guns. She served in the German fleet throughout the 1890s and was rebuilt in 1901–1903. She served in the VI Battle Squadron after the outbreak of World War I in August 1914, but saw no action. Ägir was demobilized in 1915 and used as a tender thereafter. After the war, she was rebuilt as a merchant ship and served in this capacity until December 1929, when she was wrecked on the island of Gotland.

In the late 1880s, the German Kaiserliche Marine (Imperial Navy) grappled with the problem of what type of capital ship to build in the face of limited naval budgets (owing to parliamentary objections to naval spending and the cost of dredging the Kaiser Wilhelm Canal). General Leo von Caprivi, the new Chef der Admiralität (Chief of the Admiralty), was able to secure approval from the Reichstag (Imperial Diet) for ten small coastal defense ships, the first six of which became the Siegfried class, which carried three main battery guns in individual barbette mounts. Proposals for the last four included redesigning the vessels to add another main battery gun in two-gun turrets came to nothing owing to the cost of other naval programs—most notably the Brandenburg-class battleships. The two Odin-class ships were ultimately built to a modified version of the Siegfried design that incorporated improvements to the armor layout and other minor changes. They carried their armament in an unusual layout, with two heavy guns forward that could be independently aimed; tactical doctrine of the day envisioned the ships breaking through an enemy line of battle (as the Austrians had done at the Battle of Lissa in 1866), and the arrangement would have allowed each ship to engage multiple targets.

Ägir was 79 meters (259 ft 2 in) long overall and had a beam of 15.20 m (49 ft 10 in) and a maximum draft of 5.61 m (18 ft 5 in). She displaced 3,550 t (3,490 long tons) normally and up to 3,754 t (3,695 long tons) at full load. Her propulsion system consisted of two vertical 3-cylinder triple-expansion steam engines. Steam for the engines was provided by eight coal-fired Thornycroft boilers. The ship's propulsion system provided a top speed of 15 knots (28 km/h; 17 mph) from 4,800 metric horsepower (4,700 ihp), though she exceeded both figures slightly on speed tests. She carried 370 t (360 long tons; 410 short tons) of coal, which gave her a range of approximately 1,490 nautical miles (2,760 km; 1,710 mi) at 10 knots (19 km/h; 12 mph). Because she had twice the number of electrical generators as her sister, Ägir was nicknamed "Elektrische Anna" (Electric Anna). The ship had a crew of 20 officers and 256 enlisted men.

The ship was armed with three 24 cm (9.4 in) K L/35 guns mounted in three single-gun barbettes fitted with gun shields. Two were placed side by side forward, and the third was located aft of the main superstructure. They were supplied with a total of 204 rounds of ammunition. The ship was also equipped with a secondary battery of ten 8.8 cm (3.5 in) SK L/30 guns in single mounts spaced along the center part of the vessel, five guns per broadside. Ägir also carried three 45 cm (17.7 in) torpedo tubes, two in swivel mounts on the deck amidships and one in the bow, submerged below the waterline. The ship was protected by an armored belt that was 240 mm (9.4 in) thick in the central citadel, and an armored deck that was 70 mm (2.8 in) thick. The conning tower had 120 mm (4.7 in) thick sides.

In 1903–1904, Ägir was extensively rebuilt. Her old boilers were replaced with eight new Marine type boilers and her length was increased to 86.15 m (282.6 ft). This increased her displacement to 4,376 t (4,307 long tons; 4,824 short tons) at full load. The lengthened hull, which improved her hydrodynamic shape, and the improved boilers increased her speed by a full knot, to 15.5 knots (28.7 km/h; 17.8 mph). Her coal storage was increased to 580 t (570 long tons; 640 short tons), which allowed her to steam for an additional 800 nmi (1,500 km; 920 mi). The modernization work was completed by 1903, at which point she returned to active service.

Ägir was laid down at the Kaiserliche Werft (Imperial Shipyard) in Kiel on 28 November 1892 under the contract name "T". She was launched on 3 April 1895, and was christened by Kaiser Wilhelm II at the ceremony. Fitting-out work was completed by October 1896, and she was commissioned on 15 October 1896 for sea trials, which lasted until April 1897. Her commander during her trials period was Korvettenkapitän (KK—Corvette Captain) Johannes Wallmann. After completing her trials, Ägir had her crew reduced and she was assigned to the Reserve Division of the Baltic Sea, where she became the 2nd flagship on 29 September. The unit was at that time based in Kiel. In July, KK Oskar von Truppel took command of the ship for a month before her crew was again reduced in August. Upon the ship's reactivation in September, KK Max Rollmann became the ship's captain. Ägir embarked on a short training cruise to Wilhelmshaven in November.

The ship conducted shooting practice in 1898 and participated in the annual training maneuvers with the rest of the German fleet in August and September. During the exercises, which were held in the Baltic and North Seas, she served as the flagship of II Battle Squadron, which was temporarily formed for the maneuvers. The unit included her sister ship Odin and four of the Siegfried-class ships, along with the two Blitz-class avisos and a flotilla of torpedo boats. Konteradmiral (Rear Admiral) Paul Hoffmann flew his flag aboard Ägir. After the end of the exercises, KK Hugo von Pohl relieved Rollmann in October. In December, she and Odin visited Copenhagen, Denmark, on a training cruise.

From late April to 31 May 1899, Ägir was activated for operations with I Battle Squadron in place of the armored corvette Oldenburg, which had accidentally run aground and needed repairs. Ägir participated in a cruise with the rest of the squadron to Britain, where they represented Germany at an international fleet review held for Queen Victoria's 80th birthday. The ships then cruised south to visit Portugal. During a cruise in the Kattegat in June, Ägir was among the vessels that came to the assistance of the Norddeutscher Lloyd steamship SS Kaiserin Maria Theresia, which had run aground. She also helped pull free the protected cruiser Hansa, which had also grounded in the Great Belt. The next month, KK Max Bachem replaced Pohl. During the fleet maneuvers that year, Ägir served as the flagship of IV Division, II Squadron, under the command of KAdm Conrad von Bodenhausen. The ship's participation in the exercises was cut short on 28 August, when she collided with the British steamer SS Aberfoyle off Darßer Ort during a night training exercise. Aberfoyle struck Ägir below her forward main battery gun on the starboard side below the waterline in the accident, causing a serious leak. She was forced to return to the Kaiserliche Werft in Kiel for repairs. The work was completed quickly, allowing Ägir to participate in the latter stage of the maneuvers. Following the conclusion of the exercises, she returned to the Reserve Division.