When Mata Parvati inquired about the Omkareshwar Shivling, then Lord Shiva narrated a story from Kashi Khanda, Chapter 73.
Kashi is a holy place that is graced by many such Shiva Lingas. Lord Brahma once performed a terrible penance for many years, and an extremely powerful energy came out from below, entered the ground, and spread pure light all around. Lord Brahma saw the divine energy representing the three Vedas (Rig, Yajur, and Sama Vedas) in the form of a divine shivling. Lord Brahma saw the energy of Om, which today rules the entire universe, in that heavenly light, which stood for Akara, Ukara, and Makara. Lord Brahma saw a demon with four horns, seven arms, and two heads. He also saw a divine power that contained all the Vedas, Puranas, and the five Brahmans (Akara, Ukara, Makara, Nada, and Bindu).
The Panchakshara Linga (Panch+Akshara, which stands for the five syllables given in the titles above) mesmerized Lord Brahma so much that he started praising Lord Shiva whom he could see standing in front of him. The praises that Lord Brahma devotedly offered to Lord Shiva are described in great detail by the Kashi Khanda. Lord Shiva granted a divine blessing to Lord Brahma in response to his earnest prayers. Lord Brahma wanted Omkareshwar Mahadev to be the name of the Shiva Linga, which manifested as divine energy, and that Lord Shiva should always reside there. Accordingly, Lord Shiva granted permission and decided that the Shiva Linga would be known as the Shiva Panchayats and would serve as a representation of Aakar, Ukar, Makara, Nada, and Bindu.