After the occupation of Bosnia and Herzegovina in 1878, or more precisely on August 20th of the same year, the Sarajevo City Council was formed under the orders of the Austro-Hungarian government, which until 1881 was located in a building on the left bank of Miljacka, in the old Zildziluk, and from 1886 in Dzenetic House on Bistrik. The need for the construction of a representative building as the headquarters of the city administration was expressed in 1880, but construction of the Sarajevo City Hall starts in 1892.
The first project was entrusted to Karl Parzik, whose project had remarks by Minister B. Kallay that the architect did not want to accept, so the design of the new project was entrusted to architect Alexandar Wittek, who was working on it from 1892 till 1893. Since Wittek designed City Hall in Neo-Moorish style, he went twice to Cairo in order to study buildings constructed in this style. His models were the mosque and madrasa Hassan II in Cairo, Egypt. As Wittek (allegedly because of this project) got mentally sick and committed a suicide, the work on the project was continued by Ćiril M. Iveković. With the small changes of Wittek's solution, the project ended in 1894.
Construction of the building started in 1892, and it was completed in 1894, during the time of designing of this project. The building was officially opened on April 20, 1896, when the Baron Ivan Apel officially handed over to the City Hall.