In 1903, on a picturesque street at the foot of the Svyatoyurska (St. George's) Hill, a hospital was founded for all residents of Lviv and Galicia, regardless of their faith or nationality. Its founder and patron was Metropolitan Andrey Sheptytskyi who allocated a plot belonging to the property of the Basilian monastery of St. George. Originally, the hospital was situated in a small single-storied house consisting of seven rooms. As the treatment was free, a lot of patients came there. As the old building became insufficient, an idea to construct a new building, designed for 100 patients, arose in 1930.

The first project of the hospital was designed in 1928-1929 by architect Yevhen Nahirnyi. However, the author of the final project and the construction manager in 1930-1937 was Oleksandr Pezhanskyi (Aleksander Peżański). The four-storied building has modest forms and no decorations; it is built of brick and plastered and has a three-pitched roof. The main entrance is accentuated by a typical Functionalist-style portal with protruding pylons and a small roof on top.

The funds for the hospital construction were provided by Metropolitan Andrey Sheptytskyi, by Lviv's Ukrainian community and by the Ukrainians of America, who passed 50 thousand dollars. The construction was prolonged due to lack of money and constant changes in the project when it was filed for approval at the city and province councils. After opening the institution was maintained through membership fees, charity and backing on the part of the Provincial Sejm and the Lviv city council.

After the inauguration of the hospital it was suggested that it should be called the Metropolitan A. Sheptytskyi Hospital 'Narodna Lichnytsia'. It consisted of three departments, those of internal medicine, surgery, and gynaecology. In addition to the permanent staff, young doctors preparing to work in the province practised at the institution. There was a large garden behind the building which belonged to the Greek Catholic metropolis.

In the Soviet times there was the 3rd city hospital there, which was somewhat developed in 1985. After Ukraine became independent, the hospital's status and its old name were restored.