The building that now hosts the museum is believed to have been constructed in 1916 (1909 E.C.) through the combined expertise of Armenian, Indian, and local Ethiopian architects. Between 1935 and 1940, it served as a camp for the Italian Fascist occupying forces. Later, in 1981 (1973 E.C.), the President of Ethiopia, Mengistu Haile Mariam, officially inaugurated the museum, and the building formally began serving its cultural purpose. Since then, it has housed a rich collection of cultural and historical artifacts that reflect the heritage, identity, and traditions of the Wollo and surrounding peoples.

Unfortunately, the museum was severely affected by the recent conflict in the northern Ethiopian regions and the impacts of climate change. As a result, both the building and its collections suffered considerable damage. Recognizing its cultural significance, the Ethiopian Heritage Trust, with financial support from the British Council's Cultural Protection Fund (CPF) in collaboration with other partners, undertook a comprehensive renovation of the museum. After restoration of the structure, improvement of visitor facilities, and enhancement of artifact safety, the museum was officially reopened to the public on may 31, 2025 (ግንቦት 23, 2017 E.C.)