In August 2006, an agreement was reached between the University of Cambridge and the Kavli Foundation for the establishment of an Institute for cosmology.

[2] The Kavli Foundation will support several 5-year senior research fellowships in perpetuity, and the University committed to provide a building to house the Institute.

Operation began in October 2008 with the appointment of the first Kavli Institute Fellows.

The building was completed in July 2009, and was officially opened 18 November 2009 by Prince Philip as Chancellor of the University in a ceremony with Fred Kavli.

It is intended to be similar in architectural style to the Hoyle Building, but to be sufficiently distinctive so as to retain an independent identity.