From a 2010 NPR article:
If someone asked you what part of the lamb the shank comes from, you'd probably guess right: It's the lower part of the leg, from the knee down. The kneeward part is the meaty part; there's practically nothing as you get toward the hoof. As in any animal, the most-used muscles are the toughest ones.
In spite of being "one of the toughest cuts," shanks can be the centerpiece of a simply seasoned braise. Quickly seared in a hot pan, then braised (cook slowly in liquid in a lidded pot) at a low temperature, it takes very little effort to bring a richly flavored meal to the table. When the meat is cooked, I usually remove it from the pot and cook down the braising liquid to make an easy sauce to top the meat.