With other leaders of the Nepali Congress Party (NCP), Girija Prasad went into exile after his release in 1967 and did not return to Nepal until 1979.

Later, in 1952, he became the President of the Morang District Nepali Congress and held that office until he was arrested and imprisoned by King Mahendra following the 1960 royal coup.

[12] Koirala was actively involved in the 1990 Jana Andolan which led to the abrogation of Panchayat rule and the introduction of multiparty politics into the country.

He was subsequently elected as the leader of the Nepali Congress parliamentary party and was appointed as prime minister by King Birendra.

[11] During his first term, the House of Representatives enacted legislation to liberalize education, media and health sectors in the country.

Koirala Institute of Health Sciences(BPKIHS) in the Eastern Development Region and granted licenses to the private sector to run medical and engineering colleges in various parts of the country.

[citation needed] Koirala became prime minister in 2000 for his third term following the resignation of Krishna Prasad Bhattarai, under whose leadership the Nepali Congress Party had won the parliamentary election.

After the Loktantra Andolan and the reinstatement of the Nepal House of Representatives, Pratinidhi Sabha, on 24 April 2006, Koirala was selected to become prime minister by the leaders of the Seven Party Alliance.

The reinstated House of Representatives passed laws to strip the King of his powers and bring the Army under civilian control.

Koirala, speaking to the Constituent Assembly shortly before the vote, said that "we have a big responsibility now"; he said that Nepal was entering a "new era" and that "the nation's dream has come true".

[13] In the discussions on power-sharing that followed the declaration of a republic, the Nepali Congress proposed that Koirala become the first President of Nepal; however, the CPN (Maoist), which had emerged as the strongest party in the Constituent Assembly election, opposed this.

[6] Indian Prime Minister Manmohan Singh released a statement expressing his condolences, saying "Koirala was a mass leader and a statesman, whose knowledge and wisdom guided the polity of Nepal in the right direction at critical junctures in the country's history,"[11] while Ban Ki-moon, Secretary-General of the United Nations said "Koirala fought fearlessly and at considerable personal sacrifice for justice and democratic rights in his country"[20] and senior Maoist politician Baburam Bhattarai said "Koirala will be very much missed, especially now that the country is nearing the end of the peace process that he facilitated".