[1][2] AIIMS Deoghar was set up as part of the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) initiative, announced by the Government of India in 2003 and officially launched in March 2006, for the purpose of "correcting regional imbalances in the availability of affordable/reliable tertiary healthcare services", through setting up AIIMS Delhi-like institutions and upgrading government medical colleges.

[5] On 1 February 2017, in the budget presentation for 2017–2018, Minister of Finance Arun Jaitley officially announced the intent to establish an AIIMS in Jharkhand, as well as one in Gujarat.

[19] On 12 June 2022, the In-Patient Department (IPD) along with Academic and Administrative Block was inaugurated by Shri Narendra Modi.

In November 2022, Institute has been permitted to run postgraduate courses with 7 number of seats allocated for the INI-CET January 2023 session.

The 40-room outpatient department was inaugurated by the then Minister of Health and Family Welfare, Mansukh Mandaviya, on 24 August 2021, including a night shelter facility for the patients and attendants.

The hospital is expected to be completed by the end of 2023 and will be totally functional with 750 beds ipd and opd facilities.