The grounds of the present day Government Palace and Sükhbaatar Square were largely occupied by the monastery of Ikh Khüree, the central temple-palace complex of the city up until the early part of the 20th century.

The monastery had a large open area (later the main city square) which was surrounded on all sides by temples, residences of the nobility and clergy as well as the Baruun Damnuurchin market.

The adjoining Ikh Khüree Monastery was completely destroyed by the country's communist regime in the 1930s as part of large scale persecutions of the Buddhist Church.

Mongolia's supreme leader Marshal Choibalsan participated as a simple worker digging out the marker on the spot chosen for Sukhbaatar's statue.

Completed in 1954, Sükhbaatar's Mausoleum served as the viewing platform for party leaders and high ranking government officials during national day and May 1 parades every year until the Democratic Revolution of 1990.