The palace was commissioned by Prince Andrey Kyrillovich Razumovsky as a Neoclassic embassy worthy of the representative of Alexander I.
It was built at the prince's own expense and to the designs of Louis Montoyer, in Landstraße, close to the city center of Vienna.
On New Year's Eve 1814, the prince held a glittering ball with Tsar Alexander I as guest of honour.
To accommodate the guests, Razumovsky erected a temporary ballroom extension, heated by a flue from the palace.
After all the guests had gone, the flue caught fire, setting the ballroom ablaze and burning out roomfuls of art in the palace.