The impressive building which now houses the hotel was built in 1897 by the Lehmanns family in the then Dworcowa Street (Bahnhofstrasse) in Giżycko (Lötzen). The façade of the building, richly decorated with stucco ornamentation and asymmetrically arranged, incorporates some innovative solutions of the just emerging Art Nouveau style, even though the entire building is a typical example of the eclectic architectural style, which was popular in the second half of the 19th century. It combines Neo-Gothic, Neo-Renaissance and Neo-Baroque elements. Over the main entrance and the staircase, there is a quadrangular tower modelled on the latteral towers of the Palais du Louvre in Paris, which in itself is a very interesting architectural detail. The Lehmanns' residence was the most beautiful building in Giżycko at the time. Because of its landscape values and its significance as a tourist destination, the region began to be called the "Masurian Bregenz" (Masurische Bregenz).

The Lehmanns Family became members of the Giżycko patriciate when two brothers - Johann Rudolph and Eduard made a fortune during the construction of the Boyen Fortress (Feste Boyen) in the middle of the 19th century. Johann Rudolph started off with a small locksmith workshop, eventually becoming a respectable building contractor, manufacturer and a trader. Eduard was involved in the processing of Masurian wood, building sawmills in Ruciany (Rudczanny) and Giżycko and putting them into service.

The two brothers also contributed to the establishment of inland waterways on the Great Masurian Lakes. They bought a steamship "Guszianka" in Królewiec (Königsberg), which they used for transporting timber. The Lehmanns' sawmill and mill were located at the Niegocin Lake (Löwentinsee) at the end of Dworcowa Street – less than 200 metres from the building which was to become the family's residence and the office of their trading company.

Between the end of 1914 and early 1915, the field marshal Paul von Hindenburg, commander of the defence forces in East Prussia, took residence in a villa in Dworcowa Street, not far from the house of the Lehmanns Family. After the war, the street was renamed as Hindenburgstrasse to commemorate this event. The great crisis of the 30s did not spare the hairs of the Lehmanns brothers – the building was confiscated by Reichsbank and was used as a bank office until 1945.

In January 1945, the Soviet occupation army closed off the entire street as an area adjoining the railway platforms – this was where German goods were stored and prepared for transportation to Russia. Not until the mid 50-ties did the Polish administration convert the former residential house of the Lehmanns Family into communal flats, having previously renamed the street as Dąbrowskiego Street.

The first Polish residents of the building were mostly displaced families from the region of Vilnius, Grodno and Volhynia, as well as assimilated Masurian locals. The building was increasingly falling into disrepair, so the last residents were relocated in the first decade of the 21st century.

In 2007, the historic building was purchased by a new owner, who wished to restore it to its former glory. The building was thoroughly renovated, with every precaution being taken to preserve its architectural and historical integrity, and restored as a high-standard hotel.

In the summer season of 2010, the hotel was ready to welcome its first guests, offering 29 rooms equipped with multimedia (satellite television, wireless Internet), safety deposit boxes and mini-bars, a stylish restaurant and bar, as well as two air-conditioned conference rooms with audiovisual equipment, located on the Neo-Gothic ground floor of the building. The best asset of the hotel, however, is its location - just 200 metres from the large Niegocin Lake, making it an ideal place for recreational activities and water sports in the summer and ice-boating and under-ice fishing in the winter.

The Masovia Hotel offers an original combination of the historical fine de siècle style of East Prussia with the beauty of today's Masurian Lake District of the 21st century, which is a candidate for the "New 7 Wonders Of Nature".