Located outside Hisar Gate, the construction of the temple dates back to the 13th Century. It was built by Sarsai Nath, a saint of Nath sect, followers of Shiva, who is said to have meditated here. This place is held in high esteem by the people of the area. An inscription of Bhoja, the Pratihara ruler was found at Sirsa. It records that Nilkantha, a saint of Pashupati sect constructed the temple of Yogisvara (Shiva) made of burnt bricks and thick slabs of stones with a golden Shikara. Though no remains of this temple have been found, yet it indicates that Saivism and Pashupati sect flourished here at Sirsa during the 8th and 9th centuries.

Mughal Emperor ShahJahan visited the Dera Baba Sarsai Nath for blessings for his ailing son. The emperor built a dome and donated land to the temple. A document in Arabic, in possession of Dera authorities testify emperor ShahJahan's visit to the temple. The Dera has temples of Shiva and Durga.