Government of Gujarat and PHFI entered a MoU in 2007 to establish IIPHG. Under the MoU, Government of Gujarat allocated land and agreed to share a part of the project cost. In 2008, the foundation stone for IIPHG was laid by Honourable Prime Minister of India, Shri. Narendra Modi (then Honourable Chief Minister of Gujarat).
The institute started its operation in July 2008 from its interim location in Ahmedabad with the commencement of its 1st batch of Post Graduate Diploma in Public Health Management (PGDPHM). In-service medical officers from the states of Gujarat, Chhattisgarh, and Madhya Pradesh were sponsored by National Rural Health Mission (NRHM) to attend this course.