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Alexander Wittek, who worked on the project in 1892 and 1893, fell ill and died in 1894 in Graz, and the work was completed by Ćiril Iveković. The edifice was built in a stylistic blend of historical eclecticism, predominantly in the pseudo-Moorish expression, for which the stylistic sources were found in the Islamic art of Spain and North Africa.

Building works began in 1892 and were completed in 1894, at a cost of 984,000 crowns, with 32,000 crowns provided for fixtures and fittings. It was formally opened 20 April 1896, and handed over to the City Authority, which occupied the property until 1949, when it was handed over to the National and University Library of Bosnia and Herzegovina.

On 25 August 1992, Serbian shelling during the Siege of Sarajevo caused the complete destruction of the library; among the losses were about 700 manuscripts and incunabula and a unique collection of Bosnian serial publications, some from the middle of the 19th century Bosnian cultural revival. Before the attack, the library held 1.5 million volumes and over 155,000 rare books and manuscripts. Some citizens and librarians tried to save some books while they were under sniper fire, at least one person died.

The majority of the books could not be saved from the flames. The structural repair of the building was planned to be carried out in four stages: 1996–1997 (financed by a donation from Republic of Austria), and 2000–2004 (financed by a donation from the European Commission), and the city of Barcelona among others. The third stage ended in September 2012, with an estimated cost of KM 4.6 million (about €2.37 million) and will return the city hall to its former grace. The fourth stage began following the completion of the third stage and lasted about 20 months, finishing at the end of 2013 and cost of KM 14 million (about €7.23 million) which are secured through the IPA. In this stage the whole interior was built and reconstructed (paintings, sculptures, books), meaning the building is brought back to function. Everything that was possible to restore has been done so, while those things that were not possible to save have been made anew through special molds. The whole reconstruction and restore process was predicted to cost about KM 25 million (about €13 million).

After it was repaired, the building, now a national monument, has been used for variety of events. Its space has been be used for various protocol events for all levels of government, concerts and exhibitions.