Located in the centre of Granada, on Calle Oficios, it was founded by Yusuf I in 1349, during the Nasrid era. It is also known as Yusufiyya or the house of science and was the first university to be established in Granada.

Located in the very heart of the city, it once occupied one of the most privileged positions, in the environs of the main mosque and the Alcaicería, the most distinguished commercial area. Its rooms were employed to teach medicine, law and mathematics.

With the arrival of Gonzalo Jiménez de Cisneros and following the revolt of the Moorish converts due to violation of the Capitulations of Santa Fe which stipulated that the Madraza would continue to operate, the library was taken to Plaza Bib-rambla and burned in a bonfire. Having been plundered and closed down, it was transferred to the old City Hall of Granada for a long period. Nowadays, the palace belongs to the University of Granada.