The Pananeion Municipal Hospital takes its name from Pananòs Theodoulakis, who, together with his wife Athena, secured the necessary funds for its construction. According to the marble inscriptions set into the building’s entrance, the foundation stone was laid on 28 May 1895. Construction was interrupted by the 1896 upheaval. Following the establishment of the Cretan State, work resumed in December 1900, and the official inauguration took place with ceremony on 10 February 1902 at the church of Saint Panteleimon, which was built within the central courtyard of the complex. At that time, the founders entrusted the hospital to the metropolitan church of Saint Menas, and a year later the parish committee transferred it by notarial deed to the Municipality of Heraklion.

The site for the complex was selected, following careful study, as the healthiest location within the city walls. The building is of stone construction and was roofed with timber-framed tiles. It is a rectangular structure, with a central courtyard around which the patient wards were arranged on the eastern and western sides. The internal organisation is strictly ordered, and the overall form of the complex is remarkably austere. Today, it survives in a ruined state.