When East Timor resumed independence in May 2002, the new President, Xanana Gusmão, considered that he needed to have a presidential office discrete from the one occupied by the Constitutional Government, then headed by Prime Minister Mari Alkatiri.

[13] In April 2015, a Portuguese architectural firm, Gonçalo Lencastre Arquitectos, announced a project intended to "endow the Presidency of the Republic of Timor-Leste with a physical space with the necessary dignity and functionality", by upgrading and expanding existing structures, including the palace complex.

One of the architects involved in the project, Cristina Picoto, explained that the buildings would all be 1 metre (3 ft 3 in) off the ground to avoid flooding, and were not intended to be "monumental in scale".

Speaking at the project's announcement, the then Chief of Staff of the President, Fidélis Magalhães, said that its execution would be phased, with a multi-annual plan of 10 or 20 years, depending on budgetary capacity.

[19] Additionally, Ramos-Horta had announced an unwillingness to move into the Palácio de Lahane, the former official residence of the Governor of Portuguese Timor, which had recently been refurbished.

[18][20] In the entrance hall of the palace is an exhibition, 'Lost World' (Portuguese: O Mondo Perdido), prepared by the Science Centre of Monash University, Australia, with support from ConocoPhillips and the Australian Defence Force.

[23] The exhibition was previously displayed at the Municipal Market of Dili until that building was converted into a convention centre, and is expected to remain at the palace until the completion of the proposed National Museum of East Timor.