There were no professional sports in Lithuania that regained its independence after the First World War. Due to no sports, there were no stadiums, swimming pools or other venues suitable for promoting them, and there was no one to educate either. On the one hand, sports were not a priority area to be taken up first in the context of the reconstruction of the country and its economy. On the other hand, the general public saw sports as a leisure activity for those who lack activity. The promotion of sport was greatly influenced by emigrants from Lithuania, who, on their return to their homeland, trained local athletes as well. They tried to promote sport under any conditions and with minimum effort. Sport became a more massive phenomenon in society with the growth of youth and paramilitary organisations. The importance of physical education was reinforced by the introduction of military training in Lithuanian schools in 1929.
During the 1930s, the situation changed little. The state started to take care of almost all areas of citizens' lives. The sport was also institutionalised. This was linked to the emerging ideas of modernism and the awakening of national consciousness. The fashionable body of the time is strong and muscular, agile, tanned, modern, sporty, energetic, and aware of a healthy lifestyle. It is approaching an ideal of the body based on the cult of the body and sports games. In 1932, the Palace of Physical Education was finally established as a sports centre and physical education. However, the physical form of the Palace of Physical Education had to wait until 1934. The choice of the site for its construction emphasised the importance of fresh air for the exercising body. Moreover, it was close to the centre and far from the city's dust and noise. Therefore, the chosen plot was located at the edge of Oak Grove, next to the first stadium in Lithuania.
Interestingly, the original design of the building was to feature a state-of-the-art indoor swimming pool as its centrepiece. Until then, there were none in Lithuania, and athletes trained in open water bodies. Not only was the pool to be lit from below (through the water), but it was also fitted with a glass roof that could be opened up for the summer to allow sunlight and fresh air to enter the hall. Unfortunately, the economic crisis meant a simpler and cheaper design option was implemented. The pool was also abandoned and was not delivered until 1959, a quarter of a century after it was conceived.
The hall, which was built in 1934, has a glazed vaulted reinforced concrete ceiling which is the most distinctive element of the palace interior. This type of ceiling was still a novelty at the time and was applied not only in this case but also in the Romuva cinema and the Šančiai church. In 1928, two smaller sports halls were built on the side wings. The centre contains administrative offices and classrooms. This educational institution aimed to train physical education teachers and army instructors and organise sports lectures of a widespread nature.
In 2015, the European Commission's decision included 44 objects of Kaunas interwar modernist architecture, including the Central Palace of the Lithuanian University of Sport, on the European Heritage Label list.