The monastery was founded around 1555 on the shore of a lake and was under the administration of all-Russian metropolitans, and later patriarchs. With its emergence in the Arzamas region, Christianity began to spread more rapidly. Initially, the monastery's buildings were wooden, but over time they were replaced with stone. The oldest church in Arzamas is considered to be the monastery cathedral in honor of the Transfiguration of the Lord, which was the first to be rebuilt in stone and has survived to this day.

By the early 20th century, the monastery had three churches and a bell tower. It was a communal monastery of the III class, which operated a spiritual school and an orphanage.

In 1927, the Spaso-Preobrazhensky Monastery was closed, looted, and severely damaged. After that, a sewing factory was located within its walls, and later a branch of the State Archive of the Nizhny Novgorod Region, which remains there to this day.

On April 20, 2005, the Holy Synod decided to resume the activities of the monastery. The monastery was given the church being restored in honor of the Annunciation of the Most Holy Theotokos, which had been a parish church before the revolution.

The Annunciation parish was located near the Spassky Monastery, not far from the fortress walls. In 1775 and 1788, a new church was built on the site of the wooden and stone church, the architecture of which partially borrowed elements from the Assumption Cathedral, recently built in the Sarov Desert.

The Annunciation Church was closed in 1929 and was used as a dormitory for students. Later, it housed a fuel storage and a savings bank.

The restoration of the church began in the winter of 2004-2005, and on Christmas 2006, the first Divine Liturgy was celebrated there.

The restored chapel in honor of the Uncreated Savior, located next to the Annunciation Church, became a monastery dependency.

On October 6, 2008, Hieromonk Paisiy Yatsko was appointed as the abbot. Since May 17, 2016, Archimandrite Tikhon Zatyokin has been acting as the abbot, who is also the abbot of the Ascension Pechersky Monastery in Nizhny Novgorod.