The name of the pagoda comes from a legend: a long ago, an old woman appeared on the hill where the pagoda stands today. She told local people that a Lord would come and build a Buddhist pagoda for the country's prosperity. Lord Nguyen Hoang, on hearing that, ordered the construction of the pagoda of the "Heavenly Lady".
The pagoda is situated on Ha Khe hill, on the left bank of the Perfume River, in Huong Long village, 5km from Hue city.

It was built in 1601, and then Lord Nguyen Phuc Tan had it renovated in 1665. In 1710, Lord Nguyen Phuc Chu had a great bell cast (2.5m high, 3.285kg) and in 1715, he had a stele (2.58 m high) erected on the back of a marble tortoise.
Several kings of the Nguyen Dynasty such as Gia Long, Minh Mang, Thieu Tri and Thanh Thai, all had the pagoda restored. Phuoc Duyen tower (at first called Tu Nhan tower) was erected in 1884 by King Thieu Tri. This octagonal tower has seven storeys (2m high). Dai Hung shrine, the main-hall, presents a magnificent architecture. As well as bronze cast statues, it shelters some precious antiques: the bronze gong cast in 1677, the wooden gilded board with Lord Nguyen Phuc Chu's inscriptions (1714). On both sides of the pagoda are a room for the bonzes and a guest-room for visitors.

The pagoda is surrounded by flowers and ornamental plants. At the far end of the garden stretches a calm and romantic pine-tree forest.
The pagoda was heavily damaged in 1943. Bonze Thich Don Hau hence organised a great renovation of the pagoda, that lasted for more than 30 years.
Nowadays the pagoda is very well-maintained and very welcoming to all visitors.