This building lies on the east side of Piazza dei Cavalieri. It has a complementary role to Palazzo della Carovana since the compositional outlines of the two façades are analogous. Many scholars attribute the original design to Giorgio Vasari.
The construction of the Palazzo della Canonica, which took place under the supervision of David Fortini, began in 1566 with a project that aimed at uniting pre-existing structures into a single element. The plan was inspired by that of convents, with a double portico and thirteen independent housing units located on three floors.
The work lasted off and on for nearly forty years and was often interrupted by the use of the economic resources in the construction of the Santo Stefano church.
Palazzo della Canonica was intended to be used by the clergy of the Order of the Knights of St. Stephen, a military and monastic institution founded in 1561 by the Grand Duke of Tuscany, Cosimo I de’ Medici, in order to bring the glorious seafaring past of the ancient Pisan Republic under the insignia of the duke and to combat the incursions of the Turks and infidels in the Mediterranean. Until the Order was suppressed, the Prior of the adjacent Chiesa dei Cavalieri (Church of the Knights) and the Chaplain knights lived in the Canonica, or rectory; in the final decades of the 20th century the building first housed high-ranking prelates and then the City Engineering Offices of Pisa. At the beginning of the 1980s City Engineering restructured the part of the building which lies between the main entrance and via Ulisse Dini.
It is used to house part of the library of the Scuola Normale.