It was founded in the academic year 1999/2000 and is located in Airport Heights Muscat, Oman.

The college has from its foundation been associated with the Al-Ahliyya Amman University in Jordan, and is under the supervision of the Ministry of Higher Education (MoHE) of the Sultanate of Oman.

When the college first opened, it offered two-year diploma courses in Computer Science, Accounting, Business Administration, Finance & Banking, English Language and Literature.

A year later, in February 2004, the college asked the MoHE for permission to begin awarding its own bachelor's degrees; this was granted.

On 27 May 2012 Bank Dhofar sponsored an open day at the Al Zahra College for Women which was part of an entire week of activities including exhibitions and a showcase of Omani food, traditional handicrafts and Omani fashion.