The monastery is located in the village Margarites, 30km south of Rethymno, and was built in the late 15th - early 16th century. It is a dependency of to the Monastery of Karakalou at Athos. Its founder belonged to the Venetian family Dandolo. In front the beautiful gate there is a tomb embossed with the crest of Dandolo, preserved in very good condition till today.
The monastery appears to have started as a nunnery and according to tradition, during the Ottoman domination, the Turks approached the monastery in order to slay the nuns and loot the monastery. The nuns left the monastery and found refuge in a local cave. The Turks followed them, but according to tradition, when they got out of the cave a white cloud covered the entrance and the nuns were saved.
During the Ottoman Rule the monastery was granted to the monastery Karakalou and then it turn to male. One of the monks who lived in the monastery for six years, until 1803, was Saint Gideon, who came from Tyrnavos, Larissa (Central Greece). He was killed in 1818 at Tyrnavos by the Turks.
The last monk was the Father Callinicos who is also buried in the tomb of the founder, inside the temple. After his death, the monastery was deserted and restoration works started in October 1998 with the full support of locals. Today, the monastery houses one monk.