From the period of 1572 to 1795, the building served as the City Hall of Luxembourg, from 1795, the building served as a series of governmental building. In 1817, the building was made the official residence of the Governor, the representative to Dutch King-Grand Duke of Luxembourg. It was finally made the official residence of the Grand Duke, Grand Duke Adolphe and his family.
With the move of Grand Duke Adolphe and his family into the palace, a residential wing was renovated by Belgian architect, Gédéon Bordiau with the assistance of Luxembourg state architect, Charles Arendt.
During the Second World War, Luxembourg was under Nazi Germany occupation, as a result, the palace was used by the Germans as concert hall and tavern. With the return of Grand Duchess Charlotte, the palace was renovated and once again became the official residence of the Grand Ducal Family.
The palace received extensive external renovations from 1992 - 1996.