Íþróttabandalag Vestmannaeyja was first established in 1904 under the name KV. Usually known as ÍBV, the team are sometimes called ÍBV Vestmannaeyjar in English-speaking countries. The football club forms part of a wider sports club, which competes in a number of other sports. Throughout history, they have enjoyed occasional success in domestic competitions.
Although they are one of the older clubs in Icelandic football, ÍBV took a while to fully establish themselves as a major force within the country. The 1968 season saw ÍBV win their first major honour, the Icelandic Cup, and this success springboarded the club on to greater heights in the years that followed.
In 1972, they lifted the Icelandic Cup for the second time, before winning their first league title at the end of the 1979 campaign. The club won the Icelandic Cup for the third time in 1981, before collecting their second league title in 1997. The 1998 season was the greatest individual season in club history, as they were able to retain their league title and win the Icelandic Cup for the fourth time, completing a league and cup double in the process. To date, these two trophies remain the team's last major honours.
Iceland international striker, Tryggvi Guðmundsson, is perhaps the best-known player to have worn the ÍBV jersey and he is currently the Úrvalsdeild's record goalscorer. Other notable former players have included names like Sigurlás Þorleifsson, who was a prolific goalscorer during the 1980s, and Hlynur Stefánsson, who was named as the division's Player of the Year for 2000.
The club's home games are held at Hásteinsvöllur in Vestmannaeyjar. The venue opened in 1912 and underwent major renovations in both 1960 and 2012. It currently has 534 seats, but is able to hold a maximum of 2,300 spectators when standing room is taken into consideration.