The lhakhang is said to be built based on the auspicious coincidence of lama Thubwang when viewed from Shami goenpa. Yakgang lhakhang was built in the 16th century by lama Thubwang, the son of Sangdag and grandson of tertoen Pema Lingpa. As per the prophecy made by his father Sangdag, lama Thubwang traveled to Mongar via Ngatshang and Chisang where he founded Shami goenpa which has benefited all sentient beings. According to the auspicious coincidence, lama founded Yakgang Sangachoeling lhakhang at the present location as a winter residence. Since 450 years of its establishment, the lhakhang has been managed by the descendants of its founder. Currently, the 11th heir known as lama Kinley manages the lhakhang. Yakgang Choeje is the oldest lineage that has gained popularity in the eastern district. Many sacred relics and statues discovered by tertoen Pema Lingpa can be seen in the lhakhang.