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At the beginning of the 19th century, there was a square on the site of the Theatre Garden, which in 1824, due to the arrival of Emperor Alexander I in Perm, was chosen as a parade ground. The monarch attended the Guard Mounting Ceremony of the local battalion. During the ceremonial march, the monarch clearly pronounced: “One-two, one-two… Good… Grateful… Excellent!” At the end of the ceremony, the Emperor thanked officers for excellent service and gave three rubles to each of the representatives of lower ranks.

Works on the founding of the Theatre Garden were started in Perm in 1883 by order of Governor Anastasyev. A fountain with electric lighting opened here in 1907 became the central place of the garden. By the beginning of the First World War, the Theatre Garden was one of the favourite places for walks of the townspeople. Linden trees, spruces, cedars, maples, birches, and firs were planted here, there were many shrubs, and flower beds and lawns were lined with white stones. There were comfortable benches in the garden, and not far from the fountain there was a wooden gazebo. On holidays, a brass band played in the garden.

In May and June 1918, Grand Duke Mikhail Alexandrovich, exiled to Perm at that time, used to walk around the Theatre Garden. When the weather was fine, he sometimes sat on a bench near the fountain and looked at the spray of water illuminated by electric light through colored glass.

In 1993, the Theatre Garden was named after the Russian theatrical figure Sergei Pavlovich Diaghilev, who was patronized by Emperor Nicholas II and Grand Duke Vladimir Alexandrovich, brother and uncle of Grand Duke Mikhail Alexandrovich.

Since 2020, the garden has been hosting the events of the White Flower Charity Campaign held on the initiative of the Elizabeth-Sergius Educational Society with the support of the government of the Perm Krai and the Perm Mitropolia of the Russian Orthodox Church. The campaign was successfully carried out in Russia at the beginning of the 20th century on the initiative of Emperor Nicholas II and Empress Alexandra Feodorovna.