In the 15th century, it is said that the great saint Lam Drukpa Kuenley arrived to Bhutan to subdue the evil forces. One time during his stay at Bjiligang, a sacred place in Punakha. Lama Drukpa Kuenley saw the ridge on which presently stands the chorten Nyinpo Lhakhang. Although it was surrounded by a thick forest and had many evil spirits lurking around, he saw it as a very auspicious place where his lineage would build their heavenly abode. It is said that he threw a piece of firewood from the fire burning Infront him and it Landed at the place near the present Chorten Nyingo. The tree that is located near the Tshulakhang is said to have grown from that and since the firewood landed upside down the tree is seen to have an unusual appearance from the trees around it and the embers of the firewood are said to even be seen today. The Firewood which landed in the forest is said to have subdued the evil forces in the area and also signified the Heavenly Abode (Dhensa) of his future lineages.

Because of this reason the tree is considered very auspicious. It is said to help in curing heart diseases, The barks of the tree are mixed with water to create holy water that wards off harms from evil spirit and the leaves of tree is said to help in making good alcohol for the village people as Lam Drukpa Kuenley was said to be fond of alcohol.

The chorten near the current residence of Gyalsey Tenzin Rabgye  is said to have been built by lam Drukpa Kuenley from where the earlier name of the place Kabji Chorten Gang is derived.

In the 17th Century, The Sister of the fourth desi, Gyalsey Tenzin Rabgye known as Jitshen Tenzinma established a small abode there and handed it to him. Gyalsey Tenzin Rabgye who is considered a direct descendent of Lam Driukpa Kuenley is said to have bult a small Tshulakhang in the area as his winter heavenly abode (Dhensa) fulfilling the wishes of Lam Drukpa Kuenley. When He visited the place, The chorten built by lam Drukpa Kuenley which was now almost 200 years old had grown really old. Thus, the new name of the area, Chorten Nyingpo meaning old Chorten.

In the 18th century It is said that Gyalsey Truelku Jigme Singye a reincarnation of Gyalsey Tenzin Rabgye expanded the small Tshulakhang to the size it is right now and called it the Chorten Nyingpo Minjur Lhunpo Tshulakhang. All of the paintings in the Tshulakhang and the statues were instated by him and is attributed to that era.