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Hong Kong Shue Yan College was founded on 20 September 1971 by Dr Henry H.L. Hu, then Legislative Councillor, and Dr Chung Chi-Yung, a prominent educationist.
In 2000, the Education Bureau of Hong Kong provided a fund of HKD 4.6 million for academic accreditation.
In 2001, Hong Kong Shue Yan College passed the academic accreditation of the Hong Kong Council for Accreditation of Academic and Vocational Qualifications and was allowed to offer three courses leading to different Honours bachelor's degrees.
On 19 December 2006, the Executive Council passed a resolution to recognise and accredit Hong Kong Shue Yan College as Hong Kong's first private university, with immediate effect.
While the OUHK has accepted and designed some programmes specifically for such students since 2006, SYU announced they would not be participating in JUPAS in the foreseeable future.
In January 2007, the HKSAR government offered a one-time grant of HKD200 million (although possibly less) to establish a general development fund for SYU. The University may use the interest to support its academic development and improve the campus facilities.
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