The palace was meant to house the Shah's treasury, and the jewels he had taken from India.

The namesake of the palace was a wife of Nader apparently, who was named "Khorshid", meaning "Sun".

After Nader's demise the construction process was halted, which is clearly visible from the state of the building and the calligraphies and paintings.

[4] Located in the middle of a large garden, it used to be 25 meters tall in 3 floors, but the third floor was ruined over time and the current height of the building does not exceed 20 meters.

[1][5] There is evidence that the place was used as a residential headquarter in early Qajar era.