The palace was constructed by king Nikola I Petrović-Njegoš in 1885, and was a gift to his daughter Princess Zorka and his son-in-law, Prince Petar Karađorđević.
The complex includes the large and the small palace, a chapel, houses for the guards and a winter garden.
In 1915, it was sunk in the Bar harbour by the Austro-Hungarian navy.
Currently, the palace houses the city museum of Bar.
Also, it is used as a venue for festivals, concerts, exhibitions and literary events.