This observatory was constructed by Maharaja Sawai Raja Jaisingh of Jaipur in 1719 when he was in Ujjain as the Governor of Malwa under the reign of king Muhammad Shah of Delhi. Besides being a brave fighter and a politician, Raja Jaisingh was exceptionally a scholar. He studied books on astro-mathematics available in the Persian and Arabic languages at that time. He himself wrote books on astronomy.
Mizra Ulook Beig, the grandson of Temur Lung and an expert in astronomy, built an observatory in Samakrand. Raja Jaisingh constructed observatories in Ujjain, Jaipur, Delhi, Mathura and Varanasi in India by the permission of King Muhammad Shah. Raja Jaisingh set up new instruments in these observatories employing his skills. He himself made alterations in a number of main astro-mathematical instruments by observing the activities of planets for eight years in Ujjain.
Thereafter the observatory remained uncared for two decades. Then as per the suggestions of Siddhantavagish, (Late) Shri Narayanji Vyas, Ganak Churamani and (Late) Shri G.S. Apte, the first superintendent of the observatory, (Late) Maharaja Madhav Rao Scindia renovated the observatory and funded it for its active use. Since then it has been continuously functioning.
The four yantras viz. Sun-dial, Narivalaya, Digansha and Transit instruments were made as guided by Raja Jaisingh in the observatory. The Shanku (Gnomon) Yantra was prepared under the direction of (Late) Shri G.S. Apte. Having arrived at the last moments of its position, the Digansha Yantra was re-constructed in 1974 and the Shanku Yantra was re-built in 1982. Marble notice-boars displaying information about the instruments were prepared, both in Hindi and English, in 1983.
Miss Swarnmala Rawala, the then Commissioner of Ujjain Division, took great pains to completely renovate and beautify the observatory in 2003. In addition, solar-power-operated solar tube-lights were installed with the help of Energy Development Corporation and beautiful banks were constructed along the holy River Kshipra at the Observatory site under the guidance of M.P. Laghu Udyog Nigam. The School Education Department in 2003 purchased an automatic telescope having 8 inches diameter to facilitate visitors see planets through it.
In the premises of the observatory, a planetarium, an interpretation center, an administrative building, a library and a conference hall were built in the year 2009 by the M.P. Tourism Development Corporation.
The Vedh Shala is less than 5 km from Ujjain railway station (Madhya Pradesh).