After the Austro-Hungarian campaign in Bosnia and Herzegovina in 1878, the occupation administration required a headquarters in central Sarajevo to house various staff and military personnel.

The new government building was commissioned by the first mayor of Sarajevo Mustafa Fadilpašić and designed by architect Josip Vancaš in Renaissance style, and was constructed from 1884 to 1886.

The building remained as the headquarters of the Austro-Hungarian regime in the area, housing government and military departments, as well as law courts and ceremonial rooms.

After World War II, the building became the official residence of the President of the Socialist Republic of Bosnia and Herzegovina (within Yugoslavia), as well as the home of the Executive Committee of the People's Assembly.

During the Bosnian War, the building was used by the Supreme Command of the Army of the Republic of Bosnia and Herzegovina as its military headquarters.