From the Catholic Encyclopedia of 1907:
The name Agnus Dei has been given to certain discs of wax impressed with the figure of a lamb and blessed at stated seasons by the Pope. They are sometimes round, sometimes oval in diameter. The lamb usually bears a cross or flag, while figures of saints or the name and arms of the Pope are also commonly impressed on the reverse. These Agnus Deis may be worn suspended round the neck, or they may be preserved as objects of devotion. In virtue of the consecration they receive, they are regarded, like holy water, blessed palms, etc., as "Sacramentals".
From the time of Amalarius (c. 820) onwards we find frequent mention of the use of Agnus Deis. At a later period they were often sent by the Popes as presents to sovereigns and distinguished personages. A famous letter in verse accompanied the Agnus Dei despatched by Urban V to the Emperor John Palaeologus in 1366. In the penal laws of Queen Elizabeth Agnus Deis are frequently mentioned among other "popish trumperies" the importation of which into England was rigorously forbidden.
We learn from an "Ordo Romanus" printed by Muratori ("Lit. Rom", II, p. 1,004) that in the ninth century the archdeacon manufactured the Agnus Deis early on Holy Saturday morning out of clean wax mixed with chrism, and that they were distributed by him to the people on the Saturday following (Sabbato in Albis). At a later date the Pope himself generally assisted at both the blessing and the distribution. The great consecration of Agnus Deis took place only in the first year of each pontificate and every seventh year afterwards, which rule is still followed. The discs of wax are now prepared beforehand by certain monks, and without the use of chrism. On the Wednesday of Easter week these discs are brought to the Pope, who dips them into a vessel of water mixed with chrism and balsam, adding various consecratory prayers. The distribution takes place with solemnity on the Saturday following, when the Pope, after the "Agnus Dei" of the Mass, puts a packet of Agnus Deis into the inverted mitre of each cardinal and bishop who comes up to receive them.
The symbolism of the Agnus Deis is best gathered from the prayers used at various epochs in blessing them. As in the paschal candle, the wax typifies the virgin flesh of Christ, the cross associated with the lamb suggests the idea of a victim offered in sacrifice, and as the blood of the paschal lamb of old protected each household from the destroying angel, so the purpose of these consecrated medallions is to protect those who wear or possess them from all malign influences. In the prayers of blessing, special mention is made of the perils from storm and pestilence, from fire and flood, and also of the dangers to which women are exposed in childbirth. It was formerly the custom in Rome to accompany the gift of an Agnus Dei with a printed leaflet describing its many virtues. Miraculous effects have been believed to follow the use of these objects of piety. Fires are said to have been extinguished, and floods stayed. The manufacture of counterfeits, and even the painting and ornamentation of genuine Agnus Deis, has been strictly prohibited by various papal bulls.
The custom in the past was that they would be distributed on the first Easter of a pontificate and every seven years after. Many had hoped that Pope Benedict XVI would revive the tradition, though it was not to be. I cherish this historical and beautiful Sacramental and feel it is my obligation to share it with others. Now if I can only find just the right reliquary to keep it in...