Kalannie was gazetted as a townsite in 1929. The name is Aboriginal, and is in a list of names from the York area where the meaning is given as "where the Aboriginals got white stone for their spears".
The main resources in Kalannie are wheat and gypsum. Kalannie is connected to the narrow gauge rail network from a branch-line on the Amery to Bonnie Rock section. The town is a receival site for Cooperative Bulk Handling.