This palace was built in 1892 by Imam Sultan Muhammad Shah Agakhan III. Since then it is one of the biggest landmark in Indian history. Aga Khan Palace is one of the finest piece of architectural beauty in the western India. The exquisite palace is surrounded by the lavish green gardens all around.

Historically, Aga Khan Palace of Pune holds great significance as from 9th August 1942 to 6th May 1944, this palace was the prison for Mahatama Gandhi, his wife Kasturba and his secretary Mahadev Bhai Desai though the last two passed away in between their captivity at the Aga Khan Palace at Pune. Both of them have memorials in their name in the same complex near Mula river and everyday several visitors visit them.

In 1969, the Aga Khan Palace at Pune was donated to the Indians by Aga Khan IV as a mark of respect to Gandhi and his philosophy. Situated near the River Mula, the palace is a simple memorial to Gandhi and his life.