The mosque was built in 1595 under Hasan Defterdar, finance minister of the Eyalet of Bosnia.[2]
The mosque was demolished by explosives on May 7, 1993, by the Serb militia during the Bosnian War. The demolition was organized by the authorities of the Republika Srpska which included the demolition of the entire Arnaudija mosque complex and Ferhadija mosque complex that were approximately 800 m (2,600 ft) distance from each other. Both mosques were destroyed in the same night just within the time frame of 15 minutes.
One of the Serbs leaders from Banja Luka, Radoslav Brđanin was convicted for his part in organizing the ethnic cleansing of the non-Serbs and destruction of the properties of Muslims, including mosques. Radoslav Brđanin was sentenced to a single sentence of 32 years of imprisonment. The reconstruction of Arnaudija mosque started in April 2017 and is expected to finish in 2024.[4][5][6]