This building is situated on the east side of the Lai Burj, and in the middle of the northern part of the Shah Jahan’s Quadrangles. It is an arcaded pavilion built completely in chaste marble by Wazir Khan for Emperor Shah Jahan in 1645 AD. Originally, it was enclosed with skillfully carved marble screen. It is a graceful arched pavilion, with its parapet embellished with inlay work. The charming multi-cusped arches and the graceful pillars are matchless in the buildings of the Fort; its entire northern side is provided with skillfully carved marble screens. Its floor is laid in marble intarsia of different colours, in geometrical patterns. A fine cup-shaped cistern inlaid with pietradura work occupies the centre. During British period, it was converted into a chapel. Punjab Walled Cities and Heritage Areas Authority has completed its conservational works in Diwan e Khas in the year 2022 and now its open for public.