All India Institute of Medical Sciences, Bhubaneswar is one of the apex healthcare Institutes established by the Ministry of Health & Family Welfare, Government of India under the Pradhan Mantri Swasthya Suraksha Yojna (PMSSY). Under this scheme six new All India Institutes of Medical Sciences have been established at Patna, Raipur, Bhopal, Bhubaneswar, Jodhpur and Rishikesh apart from the one at New Delhi.

In his Independence Day Speech on August 15, 2003, then prime minister Atal Bihari Vajapayee announced opening up of 6 AIIMS Hospitals at Patna, Raipur, Bhopal, Bhubaneswar, Jaipur and Rishikesh under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) launched for up gradation of medicare facilities in underserved areas of the country besides providing quality medical education in super-specialty disciplines in these areas.

The foundation stone of this institute in Bhubaneswar was laid by then Prime Minister Atal Bihari Vajapayee on July 15, 2003.

All India Institute of Medical Sciences, Bhubaneswar was established as autonomous institution and institute of National importance through the All India Institute of Medical Sciences (Amendment) Ordinance passed on 16th July, 2012.