Described as an Aramic complex (monastery) as well, it holds historical significance. According to Mr. Fergusson's History of Indian and Eastern Architecture, this stupa is contemporaneous with Asoka and represents a crucial period in Buddhist history. The ruins of this complex now span approximately 3 ½ acres. The stupa was erected under the guidance of Mahinda Thero, who brought Buddhism to Sri Lanka, to enshrine the right collarbone of Buddha. As per the Mahavamsa, the Great Chronicle of Sri Lanka, this location where the stupa is situated was graced by Buddha's presence during his 3rd visit to Kelaniya in Sri Lanka. Therefore, this site is recognized as the 12th position of Solosmasthana, one of the Sixteen Buddhist Sacred Sites sanctified by Buddha, and also as one of the Atamasthana, the eight most sacred holy sites of Anuradhapura.
On the fourth day of the visit, the esteemed Mahinda Thero visited Mahameghavanaramaya and demarcated boundary lines for 32 Malakas and the Thuparamaya. According to the Mahavamsa, after the first season of "Vass", the construction of the Stupa commenced. It is mentioned that the right collar bone relic of Buddha was presented by Sakra, the king of the Gods, from the Silumini Seya. The relic was transported by an elephant to the site of the Stupa, but the elephant refused to allow it to be brought down. Upon inquiry by the king, Mahinda Thero explained that the elephant would permit the relic to be taken off only at a place of the same height as its back. King Devanampiyatissa promptly instructed his men to gather dry clay from the Abhaya Wewa (now known as Basawakkulama Wewa), constructed a mound to match the height of the elephant's back, and the elephant then allowed the relics to be removed and placed in the mound. Subsequently, the king initiated the construction of the stupa up to knee height and invited the relics to the relic chamber of the stupa. The relics ascended into the sky and, after performing a series of miraculous acts, floated into the relic chamber. A sapling of the Sri Maha Bodhi was also planted at this site. The stupa was eventually completed in the shape of a paddy heap (Dhanyakara).