It was founded as Employee’s State Insurance Corporation Medical College in 2009 by Shri Oskar Fernandes, the then Minister of Labour & Employment, Government of India.
In the year 2016, the management of the ESIC showed its reluctance to run this college at its own and ultimately the project was handed over to the government of Himachal Pradesh after signing a memorandum of understanding under certain conditions. The government of Himachal Pradesh has applied to the MCI to accord permission for starting the batch from 2017–18 for this medical college now named as Shri Lal Bahadur Shastri Govt. Medical College, Mandi at Ner Chowk