Agakhan Palace located on Pune-Nagar road, 2 km away from Yerwada was built by Sultan Mohammed Shah, Aga Khan III, in the year 1892. Agakhan Palace is spread over 19 acres of land. It was intended to be a source of employment for the famine-struck villagers in the surrounding areas. Prince Karim El Husseni, Aga Khan IV, donated the palace to the Government of India in 1969, in memory of Mahatma Gandhi and his philosophy.

It is also known as the Gandhi National Memorial because of its close association with Mahatma Gandhi, who was kept at this palace under house arrest in the 1940s during 1942, quit India Movement. His wife, Kasturba Gandhi, and his long-time assistant, Mahadev Desai, both died while under house arrest in this palace, and their samadhis (memorials) were built here by Charles Correa. A museum inside the palace complex has a rich collection of pictures and photographs of the important incidents in Gandhi’s life. You can also see statue of Mahatma Gandhi and also articles used by Mahatma Gandhi such as desk, bed, footwear.

This palace was one of the filming locations of Richard Attenborough's biopic of Gandhi. Since 1980, the museum, samadhis and campus of the Aga Khan Palace has been managed by the Gandhi Memorial Society. Exhibitions are held at the palace on a regular basis to showcase the life and career of Mahatma Gandhi. Organizations such as Khadi Gramudyog Bhandar, Rashtriy Mahila Sanstha are operating here. This place is visited by large number of tourists.