The Sankt Nicolai (also called Saint Nicholas or Sankt Nikolaus) church was built in the 13th century and was dedicated to Saint Nicholas, the patron saint of sailors and merchants.

According to legend, the Sankt Nicolai church was built by sailors who wanted to thank their saint for saving their lives during a storm at sea. The church was also used as a marketplace for merchants who came to Visby to trade their goods. 

More likely, the church was built as a parish church for the Germans in the northern district of the city. However, construction was interrupted by a fire that broke out during the building process. After the fire, the damaged church was taken over by the Dominican order, who rebuilt it as a convent church. 

Its most famous prior was Petrus de Dacia. On the north side of the church, there is a memorial plaque dedicated to him. Petrus was born on Gotland in the 1230s. He joined the Dominican order and was sent to Aarhus, Cologne, and Paris to receive theological training. In Cologne, he met a nun named Christina of Stommeln, who was said to be a remarkable woman. He became her spiritual caregiver. She was subjected to various strange phenomena such as visions, stigmata, and frightening ecstasies. Petrus returned to Visby in 1283 to work as a lecturer, but soon became the prior of the monastery in his hometown. Petrus and Christina continued to stay in touch via letters. Petrus was convinced that the Beguine Christina of Stommeln was a saint, and when he returned to Visby, he wrote her hagiography and published some of their correspondence. He has been called Sweden's first author, and his letters are the first personal love letters in Swedish literary history. Their correspondence continued until Petrus died in Visby in 1289, after six years as prior of St. Nicolai. His grave is believed to have been found in the choir.

The convent and church were burned down when the people of Lübeck attacked Visby in 1525, and due to the Reformation that followed, the church was never rebuilt. In the 19th century, the tower of the church was demolished, and the remaining parts of the building were used as a source of building materials.

In recent times, the church ruin has become a concert hall. Every summer since 1986, the Gotland Chamber Music Festival, under the direction of pianist Staffan Scheja, has been performed in the ruin. Many other artists have also performed in the church ruin, including Ainbusk Singers (1996) and Krister Dahlström (2011), to name a few Gotlandic artists. The ruin has also been used for Lucia celebrations and much, much more.