It is located in Tunis, in the prestigious Sidi Ben Arous Street, near the political power centre.
Under the Husainid dynasty, the palace was used as an annex to Dar El Bey and a residence place for the royal family.
After the Mejba Revolt, the palace was offered by Muhammad III as-Sadiq to Salah Ben Mohamed, a kahia and tribal leader who was promoted later to bach hamba (captain of the mounted police) and a lieutenant governor of El Kef for his loyalty and good services during the civil war.
In 1872, Hammuda Chahed, a rich noble and one of the biggest chaouachia corporation chiefs, bought it but kept its previous legal status as a habous.
In 1957, Dar Hammouda Pacha lost its status as a habous due to a new law, which made it possible to the touristic development society of Tunisia, and affiliate of the Poulina group to buy the palace and convert it into a prestigious restaurant called Dar Hammouda Pacha.