On the occasion of Bangkok’s bicentennial in 1982, the Rattanakosin Kingdom Project Committee proposed to Cabinet a project to renovate the area around Loha Prasat. In the proposal, the committee asked that Sala Chalermthai Theatre be demolished and the Royal Pavilion Mahajetsadabadin and a park be built on the 5,336 square-metre plot of land.
In 1986, the government established a committee to arrange celebrations for the 200th anniversary of the birth of King Rama III which was to be held on 31 March 1987. One of the projects proposed by the committee was the construction of a King Rama III statue at the site of the previous Sala Chalermthai Theatre.
The Rattanakosin Kingdom Project Committee deemed that Wat Ratchanatdaram was a temple built at the instruction of King Rama III but no statue of the King had been built there, nor elsewhere. To honour the late King, the committee approved a project to build a statue on the land near the temple.
The Royal Pavilion Mahajetsadabadin was built for King Rama IX to use to welcome the King’s guests and visiting heads of state. Previously, a temporary pavilion used for such occasions had been built at the foot of Phan Fa Lilat Bridge. The Rattanakosin Kingdom Project Committee agreed that the permanent pavilion should be built in the same area. Part of the land for the location of the Royal Pavilion Mahajetsadabodin was to be used as a park for public use. Cabinet approved the project in 1988 and appointed the Fine Arts Department to supervise. After construction was completed, the area came under the jurisdiction of the Bangkok Metropolitan Administration.
On 21 July 1990, the 166th anniversary of the coronation of King Rama III, King Bhumibol (King Rama IX) and Queen Sirikit presided over the opening ceremony of the Royal Pavilion Mahajetsadabadin, the name bestowed by the reigning King.