The idea to build a royal palace on one of the hills of Sauk, near what was later to become the Grand Park of Tirana, was first conceived by King Zog I in the 1930s.

Because of the limited funds of the nascent Albanian state, the then Minister of Finance, Mufid Libohova, entered into negotiations with a group of Italian financiers represented by Mario Alberti.

[3] The building served as a functioning royal palace only once, for King Vittorio Emanuele III of Italy during his only visit to Albania in May 1941.

[2] During the remainder of the Second World War, it served as the official residence for Francesco Jacomoni, the first Luogotenente del Re (the title of the Italian Viceroy), and later for his successor, the fascist general Alberto Pariani.

[2] On 8 October 2016, Leka II, pretender to the throne of Albania, was allowed by the Albanian authorities to organise the wedding reception of his marriage to Elia Zaharia inside the premises of the Presidential Palace.

In February 2013, Leka Zogu, pretender to the throne of Albania and who styles himself as the Crown Prince of Albania, began a legal challenge, claiming that he was the rightful owner of the Presidential Palace on the grounds that the property had belonged to King Zog I in his personal capacity, and that thus Prince Leka retained ownership as the former's heir.

[6] Leka Zogu claims to have won ownership of the building after a decision of August 2013 by the Supreme Court of Albania,[7] and has declared that the palace would become the main official residence of the "Royal Court of Albania" (Albanian: Oborri Mbretëror Shqiptar);[8] but as of 2016, the palace has remained in government possession and continues serving as the official residence of the president of the Republic of Albania, and State receptions and ceremonies, such as the annual end-of-year "Presidential Ball", continue to be held in the palace.