The New Palace (Naya Mahal) was built in the early 20th century by the Morbi royal family — the Jadeja clan who ruled Morbi as an independent princely state until 1948. The building combines Art Deco and European Neoclassical elements with Indian decorative motifs, a combination typical of the forward-looking Jadeja rulers who were known for inviting international architects and influences to their court.
Morbi's rulers under Thakore Sahib Waghji Ravajibhai were notably progressive — they introduced street lighting, a railway, and a municipal water supply to the city in the late 19th and early 20th centuries. The New Palace was part of the same modernising impulse. The building survived the catastrophic 1979 Machhu river flood that destroyed much of the old city.
The palace is not fully open to the public but can be viewed from outside. It stands in a different part of town from the Mani Mandir (the older royal palace), and together the two buildings trace the dynasty's architectural ambitions across different eras.