Founded as the College of Indigenous Medicine in 1929, it became part of the University of Colombo adopting its current name in 1977.

It is a premier center of undergraduate and postgraduate study and research into Ayurveda and Indigenous Medicine and Healthcare.

IIM was first established as the Swadeshiya Vaidya Vidyalaya (College of Indigenous Medicine) on June 10, 1929, and it was inaugurated by the then Governor of Ceylon, Sir Herbert James Stanley, at the Bauer Building situated at Cotta Road, Borella.

Captain (Dr) A.N.N Panikker of the Indian Medical Service who had qualified in western medicine in Edinburgh and possessed a sound training in Ayurveda sciences was invited to the newly established College by the Government as its first principal.

The Board of Management and the Departmental Committee of the institute are the responsible for administrative and academic matters.