The Istana was designed and built by Colonial Engineer, Major John Frederick Adolphus McNair.
In 1867, the Colonial Government under Governor Sir Harry St George Ord bought over 100 acres of land belonging to Charles Prinsep's nutmeg plantation. The foundation stone was laid by Lady Ord, wife of the Governor, in July 1867.
The entire brickwork, exterior of plastering and most of the flooring and interior work of Government House were done by Indian convict labourers. They were brought in from Bencoolen in Sumatra because the unskilled local coolies at that time were not capable of carrying out the classical design. These convict labourers worked as stone masons, plumbers, carpenters, painters and stone cutters. They even operated the kilns (used for making bricks, mouldings, copings and architraves) that were constructed on site. They were paid 20 cents a day.
An initial sum of $100,000 was voted and approved by the Legislative Council for the building of Government House in July 1867 based on the first plan by Major McNair. A plan for a larger building was subsequently approved in place of the first plan. Major McNair, however, made the mistake of not providing an estimate for the larger building owing to the shortage of staff in the Public Works Department. As a result, there were insufficient funds to complete the Government House. Fortunately, it became known that the Duke of Edinburgh – the second son of Queen Victoria – would be visiting Singapore. Major McNair seized this opportunity and cited reasons for an increase in budget for expenditure on items such as sun-shades, louvre boards, bells and cook's house. He emphasised that it was necessary to get the Building ready for a visit by the Duke.
In February 1869, the Legislative Council approved an additional sum of $40,000 without question. Subsequently, when the accounts were closed, the Government House was found to have cost $185,000.