Prior to the opening of St. Edward, there had been many failed attempted to establish a hospital in New Albany. Father Edward Faller, the priest from St. Mary's, was instrumental in the success of this venture, donating his own money to get the fundraising campaign underway. The cornerstone for the building was laid in May 1901, and it opened in April 1902, run by the Sisters of St. Francis of Perpetual Adoration. The hospital had 61 private rooms and 12 wards that could accomodate 100 patients. Additions were made to the building in 1921 and 1931.

The hospital closed on December 31, 1961, one day before the completion of a new addition to Floyd Memorial Hospital, which had opened in 1953 on State Street. The original front section of the building was subsequently demolished. After being used as a retirement home for many years, the building was adapted into apartments in the early 2000s by New Directions Housing Corporation.