The palace was built in 1672–1682. Before that, the Potockis used a wooden building as their residence, which stood on the site of the present-day Greek Catholic church.
Construction was prolonged because of the Polish-Turkish war. In 1676 the city was even besieged by the Turkish army.
The palace was built in the Italian style “palazzo in fortezza” (palace in a fortress). Fortifications with two bastions were located on the sides and at the rear, while the front façade and the park faced the city centre.
Today the remains of the palace are a three-storey building standing deep in the square.
The palace was visited by Polish King Jan Sobieski, Austrian Emperor Joseph II and Transylvanian Prince F. Rákóczi. For a long time the wife of Pylyp Orlyk lived in the palace, because the owner of the city, Józef Potocki, was an ally of the Swedes and Ivan Mazepa.
In 1801, because of the debts of Prot Potocki, the palace was sold to the Austrian state, which turned the estate into a military hospital. In 2004 the hospital was disbanded.
Today the question of creating a museum complex is being resolved.
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