A midtown plot of land was bought in 1580, and the synagogue was founded and funded in 1581 by Yitzhak ben Nachman (Izak Nachmanowicz), a financier to Stefan Batory, King of Poland.

[2] It was built in 1582 by Paulus Italus ("Paolo the Italian") from Tujetsch (Tschamut) village in canton Graubünden, Switzerland, a master builder known by his guild nickname Paweł Szczęśliwy (Paul the Fortunate, in Polish).

A local legend (first published in 1863) ascribed the merit of the restitution of the synagogue to Rosa bat Ya'akov, Yitzhak's daughter-in-law.

Rabbi Yitzhak ben Shemuel HaLevi composed in 1609 Shir Ge'ula (a Song of Deliverance) – which was read each year as a part of the shacharit prayer on Shabbat following Purim.

The Song of Deliverance compared the return of the synagogue to the Jewish community to the salvation of the Jews from the Babylonian and Egyptian captivities.

The project by the Office of Historic Environment Preservation of Lviv City Council, commissioned 2016, envisages a commemorative space.

[15] In an article by Tom Gross published in The Guardian's "comment is free" section on September 2, 2011 under the headline "Goodbye Golden Rose" reported that the authorities in Lviv, contrary to Ukraine's laws designed to preserve historic sites, were allowing a private developer to demolish parts of the adjacent remnants of the synagogue complex in order to build a hotel, which would endanger the mikvah and other Jewish artefacts, as well as possibly the remaining outer walls of the synagogue itself.

Adjacent to the site of the synagogue, Ukrainian entrepreneurs run a Jewish-themed restaurant, Under the Golden Rose, which opened in 2008.