Originally, a wooden inn belonging to the Sanguszko princes was located on plot No. 5. The Baroque palace building was erected between 1785 and 1796 or by 1799 on the initiative of the town's then-owner, Hieronim Sanguszko. Prince Hieronim Sanguszko took up permanent residence there in 1798. At the beginning of the 19th century, Hieronim's son, Prince Eustachy Sanguszko, sold the building to the Austrian authorities, who in 1825 made it the seat of the kreis and, later, in 1867, of the district.

Huge for Tarnów, the facility was built in the Baroque style. In 1836, the Tarnów starost Józef Breinl von Wallerstern took up residence in the palace.

During the Galician massacre, the peasants brought some 150 victims to the square next to the building and also brought captured Kraków insurgents to be handed over to the Austrian authorities. For their loyalty to the emperor, the starost Breinl gave the peasants 4,000 guilders as a reward.

The building was reconstructed at least twice in the 19th century. The first time was before 1831, when the building was managed by the Tarnów Starosty. It was given classicist forms, with a multi-axis façade façade and a spacious middle hallway. During the 1870 reconstruction, the classicist forms were disrupted. Around 1900 or 1901, the building was once again rebuilt, paying attention especially to the façade, which was redone to give it a neo-Baroque appearance. In the 20th century, at the behest of the Austrian authorities, based on a design by Szczęsny Zaręba, director of the Tarnów city building, the character of the building was unified to coincide with the aesthetics of the time.

In Austrian times, the building was one of the most important public buildings in the city, where governors of governorates and archdukes, for example, met with residents.

In 1918, the palace was occupied by members of the Self-Defence Committee, who forced the Austrian starost to swear allegiance to the Polish government. The building housed the district office from 1918 to 1939, and during World War II, it became one of the headquarters of the German occupation authorities. From the end of the war until 1975, the building once again housed the district authorities – the District National Council – and then, until 1990, it was the seat of the departments of the Tarnów Voivodeship Office. From 1990 to 1998 it housed the district office. Since 2004 or 2005, the building has been privately owned and unused.