The Vihara was built in 2000 in Lumbini, the birth- place of Prince Siddhartha Goutama, which is one of the most important sacred places for the Buddhists as declared by Buddha himself.
It was one of the wishes of Anagarika Dharmapala to build a Vihara at Lumbini after the construction of the Mulaganadhakuti Vihara at Sarnath. The land was donated in 1993 by the Lumbini Development Trust of the Royal Government of Nepal.
In 1996 , the then General Secretary of Maha Bodhi Society of India, Ven. Dr. D. Rewatha Thero started the plan for the construction of the Vihara. At this stage Madam Asha Okada of Japan during her visit to Sarnath encouraged him to proceed with his plan to build the temple promising funds for this purpose. In spite of several obstructions which came in the way, Ven. Dr. D. Rewatha Thero with his firm determination and continued assistance and guidance received from Madam Asha Okada, completed the construction. The opening ceremony was held in the of an international gathering on 8 November 2000.