The monastery was founded by the Galich nobleman Ioann Ovin in the second half of the 14th century as a small patronal monastery on his lands and was originally named after St. Nicholas of Myra.

In memory of the appearance of the icon of the Mother of God, known as the Ovin Icon, Ioann Ovin built a church in the monastery in honor of the Assumption of the Mother of God, and the monastery became known as the Assumption Monastery. It is traditionally believed that the Ovin Icon appeared in 1425, but modern researchers suggest that it could have happened earlier, in 1383.

The monastery gained particular fame due to the long-standing work of St. Paisius of Galich, who, upon entering the monastery, became its abbot and later an archimandrite. In 1460, after enduring a time of bloody feuds between the Moscow and Galich princes, St. Paisius passed away and was buried in the Assumption Church. By the end of the 15th century, the monastery where he labored became known as the Assumption Paisius Monastery.

In 1642 and 1646, a "cold," summer Assumption Cathedral was built on the site of the wooden Assumption church, and a few years later, a "warm," winter Trinity Church was constructed.

In 1919, the Paisius Monastery was closed, although its churches continued to function as parishes until the early 1930s.

Later, an incubator station was placed in the Assumption Cathedral, and a firewood storage facility was established in the Trinity Church. By the early 1990s, the monastery's churches had been abandoned and were gradually falling into disrepair.

On February 26, 1994, by the decision of the Holy Synod of the Russian Orthodox Church, the Holy Assumption Paisius-Galich Monastery was revived as a women's monastery.