Originally constructed as a Muslim palace during the medieval Islamic era of the Balearic Islands, the 12th-century building is one of Palma's oldest. Archaeological studies reveal a rich history of at least seven stages of the building, spanning nearly a thousand years.

The original Muslim palace from medieval times was designed around two symmetrical interior courtyards, which have been preserved as a reference to the present day. In the reception area of Nobis Hotel Palma, guests can admire a wooden Alfarje—a paneled ceiling adorned with decorative Arabic calligraphy in Nashk script, originally intended to protect its inhabitants. Remarkably, this exquisite piece survived a 13th-century fire, an earthquake, and all subsequent stages of construction. At the time of its original construction, the Sant Jaime Church, which stands adjacent to Nobis Hotel Palma today, was one of Mallorca's most prominent mosques, initially built as part of the Muslim Palace.

Following the Christian conquest of Mallorca in 1229, the building served as a fortification including a neighboring house. However, it was later ordered to be burnt down by King Alfonso III of Aragón at the end of the 13th century. The site lay in ruins for at least 100 years before becoming private residences for noble Majorcan families. The palace underwent a Gothic-style reconstruction in the mid-15th century and was later transformed into a Baroque-style palace in the 17th century.

The transformation of the historical building has been done together with Spanish architects Jordi Herrero Arquitectos and Eduardo Garcia Acuna Arquitectos and interior architects at Wingårdhs, the award-winning firm under the leadership of famous Swedish architect Gert Wingårdh and architect Helena Toresson.