The history of the Vijithapura Rajamaha Viharaya is not clearly known. According to the legends, the history of the temple goes back to the reign of the King Dutugemunu (161 BC to 137 BC). The South Indian invader King Elara who conquered the Anuradhapura Kingdom during the 2nd century BC has established a strong fort at Vijithapura. The Vijithapura battle between King Dutugemunu and invader king Elara was a decisive and major battle in the history of Sri Lanka.

However, King Dutugemunu has won that battle and after winning the war, the King Dutugemunu has constructed a stupa at this location to commemorate the Vijithapura battle. Later the Vijithapura Rajamaha Viharaya was built around this stupa. There is  a stone believed to be a stone used to sharpen the sword within this premises.