In 1579 after Kazan had been damaged by a great fire, a 10-year old girl called Matrona had a dream in which the Virgin Mary appeared and told her that she would find an icon among the ashes. As predicted Matrona found the icon depicting the Virgin Mary holding the Infant Christ. Tsar Ivan the Terrible considered that finding this miraculous icon was a blessing from heaven of his conquest of Kazan and ordered that a convent be founded on the spot where the icon was found. The Kazansky Bogoroditsky Convent was therefore established and Matrona became one of its first nuns. The Our Lady of Kazan Icon was held here until 1905, when the icon was stolen for its priceless cover. The icon was never found and it is believed that it was simply destroyed. This was seen by many believers as a bad omen for the fate of Russia in a very difficult period of revolution and war with Japan.

After the Revolution, the convent was closed in 1918 and later used as a tobacco factory and a teaching institute. During this time the monastery's Our Lady of Kazan Cathedral was knocked down. The first steps towards reopening the convent came in 1994 when St Sophia's Church was reopened for worship and then in 2004 when restoration work started on the Exaltation of the Cross Church. Finally in 2005 the convent was reopened but as a monastery. In the same year the Vatican copy of the Our Lady of Kazan Icon was returned to Kazan and is now housesd in the monastery's Exaltation of the Cross Church.