The church was built in 1868 to replace the ancient Borgund Stave Church, located right next to it. The new church was consecrated on 28 August 1868 by Pastor Henning Frimann Dahl. The church was built because the old stave church was too small for the parish, so the new church was built and the old one was turned into a museum. Christian Christie designed a new stave church-inspired building and the lead builders were F. Gade and C. Aghte.[3][4]
In a deal worked out by the local priest and the municipal council, the Society for the Preservation of Ancient Norwegian Monuments paid for two-thirds of the cost of the new church and in exchange, they took over the old stave church afterwards. After the construction was finished, there was some disagreement between the municipality and the Society, so the actual transfer of ownership did not happen until 1877. In 1948, the church received electric lighting.[3][4]