After the end of the Livonian War in 1583, von der Borch [de] family acquired the Vark castle district, it was called "Vark land" (German: Warkland , Warkelen).

The palace was designed by the Italian architect Vincenzo Macotti at the request of the estate owner, the Polish–Lithuanian Commonwealth diplomat Count Michał Jan Borch.

After the death of Count Borch in 1810, his wife, Eleonor Christine (1766-1844), and later their son, Karol Borch (1798-1861), whose daughter Maria married Paweł Roman Sanguszko [pl] (1834–1876), operated the palace.

After his death, the manor was inherited by their daughter, Teresa Sanguszko-Kowelska (1864-1954), who married Leon Paweł Sapieha [pl] (1856-1893).

Since 1997, the castle has housed the Varaklani Regional Museum, which since 2009 has been the Tourist Information Center.The palace and grounds are currently administered by the town of Varakļāni.