This elegant structure was constructed by Shah Jahan in 1636 as is evidenced by its long Persian inscription. It consists of two large halls, an outer columned hall and inner closed hall, both connected by three multifoiled archways. The outer one measures 29.26 by 10.1 m and the inner one 12.20 by 7.97 m. The outer hall is covered by a flat roof supported on multifoil arches springing from exquisitely fine marble pillars. The facade is remarkable for its double pillared arrangement with sophisticated floral bases and capitals, richly decorated with inlay of semi-precious stones. The walls and pillars of the hall are finely embellished with petra dura and dado panels with relief carvings of floral motifs.
Here is a long Persian inscription in Nasta'liq characters, inlaid in black marble, on the south wall of the Diwan-i-Khas which eulogises Emperor Shah Jahan for his glorious and just reign besides it records that the Emperor Shah Jahan has suspended a golden chain of justice for listening to the grievances of the people for justice in A.H. 1046 (AD 1636). It is apparent that Shah Jahan also followed his father in providing a chain of justice in the Diwan-i-Khas as is mentioned in the inscription.
The court met every day tor deciding appeal cases and for considering the policy matters of the Empire. Beside important persons and ambassadors of foreign countries also met the Emperor here. The Hall was remarkable for the presence of the celebrated Takht-i-Taus (The Bejewelled Peacock Throne) which was made in 1634 AD and after the construction of Diwan-i-Khas was placed here and later shifted to Delhi after the construction of the Red Fort in 1648.
The Inner Hall about which Abdul Hamid Lahauri recorded as Tambi Khana, has Shah-Nashin alcoves with a raised seat for the Emperor. The walls in between the two halls have beautiful jhalis, gracefully designed and finished with floral patterns.