Located on 1 Bankim Chatterjee Street, on the north side of College Square and founded on 1 January 1824, Sanskrit College is one of the oldest educational institutions in the country. It was established during the period of Lord Amherst, based on the proposal of a committee of Public Instruction for the Bengal Presidency and subsequently adopted by the Governor General in Council on 17 July 1823. The Committee consisted of ten members, including HT James Prinsep and Thomas Babington Macaulay. During that time, HH Wilson, the Secretary to the then British Govt., also took a major role in establishing this college to impart knowledge of ancient literature, philosophy, Hindu Law, grammar, Indian Culture and to promote the learning of Sanskrit among the British officials as well as the Indians.

However, the proposal of the committee was strongly opposed by Ram Mohan Roy, who submitted a memorandum to the Governor General on 11 December 1823 vehemently questioning the Committee's decision. He suggested that the Government should rather promote a more liberal and enlightened system of instruction and establish a college to promote Mathematics, natural Philosophy, Chemistry, Anatomy with other useful sciences by employing efficient teachers educated in Europe and also provide a well equipped college library furnished with necessary books, instruments and other apparatus. Nevertheless, Lord Amherst, paid little heed to the protest and the Sanskrit College started functioning at a rented house, situated at 66 Bowbazar Street on 1 January 1824. At the beginning, only the Brahmins and Vaidyas were admitted to attend the classes of the Sanskrit College.

Within a short time, a plot of land measuring 5 bighas and 7 cottahs on the northern side of the Gol Dighi (College Square) was purchased to construct a new building for the college. Consequently, under the auspices of Rt. Honorable William Pit Amherst, the foundation stone of the building was laid by John Paskal Larkins, a scholar of oracular knowledge, on 25 February 1825. A sum of 120,000 Rupees was allotted by the Government for the construction of the building, designed by B Buxton, Lieutenant, Bengal Engineers, and finally constructed by William Burn and James Mackintosh. Finally, on 1 May 1826, Sanskrit College shifted from the rented house of Bowbazar to its new imposing building.

Unlike the neighbouring Hindu College, which started as a private institution, Sanskrit College was a government institution from its inception, under Director of Public Instruction. The colonnaded structure of the college, built in Gothic architectural style, is gracefully designed with tall Ionic columns, added with dignified spacious balconies. The entrance, guarded by two mighty columns, leads to the giant two-storeyed hall inside. The massive hall, designed with 10 columns and balconies, was subsequently named after Pundit Ishwar Chandra Vidyasagar, the most notable Principal of the college. The college has a library of distinction, which is a vast ocean of unthinkable treasure. It has a collection of more than 200,000 books, which include many rare books and more than 20,000 invaluable manuscripts. Scholars and academicians across the world often frequent the library, famous for its enormous collection.

With the commissioning of the new building on 1 May 1826, students of both Sanskrit College and Hindu College were initially accommodated under the same roof. Classes on Ayurvedic medicine were held in Sanskrit College, for the students of the Native Medical Institution. John Tyler, the first superintendent of the said institution (NMI), also started to deliver lectures on Mathematics and Anatomy at Sanskrit College. However, with the discontinuation of NMI, the medical classes at the Sanskrit College were also discontinued by the government order of 28 January 1835.

The first English classes, albeit on an optional basis, was introduced on 1 May 1827, as a response to popular demand. Pundit Ishwar Chandra Vidyasagar joined the college as the Assistant Secretary in 1846 and promoted as the Principal of the college in 1851. It was during his tenure in the College, he was awarded the honorary title or Upadhi 'Vidyasagar, meaning the ocean of knowledge, from the College. The institution rose into prominence and glory during the Principal ship of Ishwar Chandra Vidyasagar.

The discriminating policy of allowing only the Brahmins and Vaidyas as students was abolished in January 1851, when the doors of the college were opened to the Kayasthas and all the non-Brahmin Hindus as well. By the untiring efforts of Pundit Mahesh Chandra Nỹayaratna Bhattacharya, the ‘Tol’ system was revived in Sanskrit Education and award of the traditional Sanskrit titles, called ‘Upadhis’, was also introduced.

In the wake of the Sepoy Revolt in 1857, the College building was temporarily vacated and was converted into a hospital for injured soldiers and the College was shifted to 110 and 92, Bowbazar Street at a monthly rental of Rs.75 and Rs.30 respectively. In 1858, Vidyasagar resigned from the post of Principal, to be succeeded by Dinabandhu Sharma. Subsequently, the College got back to its own premise at College Street on 1 January 1860. Despite vigorous protests from the native organizations like the British India Association, the third and fourth year classes of the college were transferred to Presidency Collage by 1872.

Regarded as a temple of enlightenment and a heritage institution of the country, Sanskrit College has been one of the finest seats of academic excellence in pertaining Sanskrit literature, Eastern philosophy, ancient Indian languages like Pali and Prakrit and ancient Indian history. After a long journey the Collage has now become a university as per Sanskrit Collage and University, West Bengal Act 2015 on 19 February 2016 and became functional on 15 June 2016, with Dilip Kumar Mohanta as the first Vice-Chancellor.