The construction of the mosque began in 1597. It was ordered by Safiye Sultan, who was the wife of Sultan Murad III and later Valide Sultan (Queen Mother) of Sultan Mehmed III. She ordered the mosque in her capacity as Valide Sultan, two years after Mehmed III's ascension to the Ottoman throne in 1595, hence the original formal name "Valide Sultan Mosque".

The original architect was Davut Ağa, an apprentice to the great Mimar Sinan. However, Davut Ağa died in 1599 and was replaced by Dalgıç Ahmed Çavuş. The construction took more than half a century and was completed by another Valide Sultan, Turhan Sultan, mother of Sultan Mehmed IV.

The project was hampered by political disconnect, and its location and monetary implications created dissent in the court. The Eminönü neighborhood was the city's foremost commercial center, and home to a predominantly Jewish population. In situating the mosque there, Safiye Sultan hoped to extend the sphere of Islamic influence within the city, capitalizing on the growing discontent of local and foreign merchants caused by the growing power and influence of their Jewish counterparts, which gave the Sultan an easy justification for confiscating their property. However, the vast monetary outlay drew sharp criticism. In particular, the Janissaries resented the growing political power of the Valide sultan, and believed the mosque to be an unnecessary expenditure. Safiye was forced to abandon the project upon Mehmed III's death in 1603. The new Sultan, Ahmed I, had no interest in pursuing the project after Safiye was relegated to the harem and the construction was abandoned.

After 1603, the partially constructed structure gradually fell into ruins; and was severely damaged during the Great Fire of 1660[1] which destroyed many neighbourhoods in the city.[1][2] Later that year, the imperial architect Mustafa Ağa suggested that Turhan Sultan, mother of Sultan Mehmed IV, should complete the project as a work of piety.[3] Turhan also ordered the construction of the nearby Spice Bazaar, which forms a part of the külliye of the New Mosque.[3] Thus, in the last months of 1660, the construction of the mosque was resumed, while the construction of the adjacent bazaar began.[3]

The mosque was finally completed in 1663, and inaugurated in 1665. It was renamed the "New Valide Sultan Mosque" (Yeni Valide Sultan Camii). In time, this name was informally shortened as the "New Mosque" (Yeni Cami) among the public.