It is unable to define the construction year of this temple. This temple formerly was Fuk Tak Tsz as its lintel was engraved with characters “Fuk Tak Tsz”. When Kwun Yum (Goddess of Mercy) was enshrined there, a large piece of horizontal tablet was installed over the temple’s entrance with characters “Kwun Yum Temple”. This temple was still the Fuk Tak Tsz to worship Tao Dai (Deity of Earth) after it was restored in 1903. But residents in the district thought that a Mong Hoi Kwun Yum (Kwun Yum facing the sea) should be enshrined in the temple to protect the safety of land and sea since a public pier was located in front of this temple. Nevertheless, since the land was insufficient to build a new temple, so they enshrined Kwun Yum in the Fuk Tak Tsz and renamed Fuk Tak Tsz as Kwun Yum Temple.
Before 1914, the temple was managed by the council set up by the merchants in Yaumatei. In 1914, the Secretariat for Chinese Affairs proposed to pass the management of the temple to Kwong Wah Hospital. The management of the temple was then officially transferred to Kwong Wah Hospital in July 1928.