The theatre was built in the mid-1960s on the initiative of the city's mayor of the time Alish Lambaranski. The Green Theatre was built as a venue intended for important cultural events.
In 1993, the theatre ceased functioning. In August 2005, Ilham Aliyev, the President of Azerbaijan ordered to carry out repairs works in the theatre.[2][3] Speaking at the opening ceremony, Ilham Aliyev hoped that the venue would become "the favourite entertainment place of the people of Baku".