The National Gallery of Iceland was founded in October 1884 in Copenhagen by Björn Bjarnarson (1853–1918), later district commissioner. The founding collection was based on gifts, mainly by Danish artists.
The National Gallery of Iceland was an independent institution from 1884 to 1916, when Parliament decided to make it a branch of the National Museum of Iceland. With a law on the Educational Council (Menntamálaráð) from 1928 the National Gallery Museum was placed directly under the control of the Council.
The collection of the National Gallery of Iceland was on exhibition in the House of Parliament from 1885 to 1950 when it was moved to the Museum House at Suðurgata, which it shared with the National Museum of Iceland. The National Gallery of Iceland was officially opened there in 1951 and received full independence by law in 1961.
In 1987 the National Gallery of Iceland moved to Fríkirkjuvegur 7. The main building was constructed in 1916 as an icehouse after drawings by Guðjón Samúelsson (1887–1950), while the new addition is the work of Garðar Halldórsson (b. 1942), then state architect.