Due to the lack of space in the Itchan Kala, the palace was built on the site of a former garden outside the city center in the northwest of Khiva.

Before the start of construction, the garden belonged to a wealthy merchant, Nurullabai, who agreed to sell his property only on the condition that the palace to be built would be named after him in the future.

Apart from craftsmen and artists of Khiva, specialists from Russia and Germany were also involved in the construction, and they had their influence on the design of the object.

After the death of his father, in 1912, Asfandiyar Khan built a separate building in the complex to receive foreign guests.

In the recent past, the main attention was paid to the preservation of the object, the reconstruction work was completed in 2017.

The complex (185.6x143.0 m) is entered from the gate through a bridge built over a ditch in the south side of palace.