In 1796, a local woman named Ma Ruren made an early donation to build a modest courtyard dedicated to Guanyin on a marshy island in Kunming's Green Lake. The project was later taken up by officials including Jiang Yupu, Liu Yu, and the Ni brothers, who jointly expanded the site. Local gentry and residents filled the surrounding wetlands with soil, stabilizing the foundation around the existing Biyi Pavilion. Over twenty-one years of labor, this community effort transformed the site into the Lotus Chan Monastery, completed in 1816.

The monastery reflects a history of diverse spiritual and political patronage. Its halls once housed a diverse array of Buddhist, Daoist, and Confucian deities. Visitors walked past a release pond for fish and turtles established on the west side of the monastery. High officials left physical marks of their presence. Lin Zexu, who served as Yun-Gui Viceroy from 1847 to 1849, handwrote the temple's name plaque. The version seen today is a replica. In 1867, Emperor Tongzhi bestowed a plaque inscribed with the words "Miao Lian Yong Xian" (Wondrous Lotus Emerges). In 1884, Governor-General Cen Yuying funded a major restoration to preserve the wooden structures.

The physical layout of the monastery aligns from west to east, sitting adjacent to the Fish Viewing Pavilion. In the 1930s, during a major renovation ordered by Governor Long Yun, workers added two double-eaved octagonal glazed-tile pavilions that still catch the afternoon sun. On the gates, a couplet by scholar Ling Shiyi describes the sensory landscape: "Ten acres of lotus flowers make a world of fish; half a city of weeping willows frame the Buddhist pavilions."

The monastery changed roles over the twentieth century. In the 1930s, it was converted into a public recreation complex. Over the following decades, it served successively as an air force club, a military guesthouse, a hotel, and a library. In 2013, the site was transformed into the Cuihu Shicui Dian Culture Center. Today, the scent of tea from modern salons mixes with the sounds of Dian opera and Yunnan Flower Lantern performances. Visitors can touch Yunnan ceramics, watch paper-cutting, and observe traditional metal forging and embroidery. The historic courtyard remains a gathering place, hosting Hanfu assemblies and the annual Lotus Festival, where the past continues to shape the cultural life of Kunming.