The construction was started in 1930 and completed in 1938.
The palace is the largest of its kind in India and the only one in Eastern India. It is so huge, it cannot be fit into a single picture frame on the standard camera until you are at a distance of approximately 800 metres from the entrance. There are only two water palaces in India, the other one being the Jal Mahal in Rajasthan. However, the latter is significantly smaller in size than Neermahal. Known as the ‘lake palace’ of Tripura, Neer-Mahal was constructed as a summer residence. It was Maharaja Bir Bikram Kishore Manikya Debbarma's idea to build a palace amidst the splendid Rudrasagar lake and in 1921 he accredited the British company Martin and Burns to construct the palace for him. The company took nine years to complete the palace. Maharaja Bir Bikram Kishore Manikya Debbarma belonged to the ‘Manikya Dynasty’ which is supposed to be the second longest remaining dynasty in the world today. The palace is the establishment of the Maharaja’s great taste and his fascinating idea of blending Medieval Hindu and Rajput traditions and cultures. The palace is divided into two parts. The western side of the palace is known as Andar Mahal. It was made for the royal family. The eastern side is an open-air theatre where drama, theatre, dance and other cultural events were organized for the enjoyment of Maharajas and their royal families. The palace has 24 rooms in total. Neer-Mahal has two stairways inside leading down to a landing on the water of Rudrasagar Lake. Maharajas used to go to the palace by hand powered boat from ‘Rajghat’. On the ceiling, the palace houses one of the most beautiful terrace gardens of India, though poor maintenance and lack of exposure to tourists has led to the depletion of beauty and splendor.