Army already had a small encampment west of the Mula River in Khadki. As more troops were required to be accommodated, a larger area was occupied to the west of the Mutha River, leading to the establishment of the Pune Cantonment in 1817  for accommodating troops of the British Indian Army. The villages of Mali, Munjeri, Wanowrie and Ghorpuri (Ghorpadi) were selected for this purpose. Initially, a garrison for 4,620 troops was planned for the cantonment. This included two European regiments, a mountain battery, a native cavalry and three native regiments.

A central belt of 130 acres (0.53 km2) was designated for training and drills. The firing ranges were located at Golibar Maidan. Soon a large number of civilians began settling in the area. This was encouraged since civilians provided services to troops garrisoned in the cantonment.

The limit of the cantonment was extended in 1822. In 1963, Ghorpuri Village (Ghorpadi) and Fatima Nagar were merged into cantonment area. The limit of the cantonment was again extended in the same year when Mundhwa village was included in the cantonment.

At present, the Cantonment is divided into 08 wards and is governed by the Cantonments Act, 2006 and various Policy letters and Instructions of the Ministry of Defence (MoD), Government of India issued from time to time. Though the Board functions as a local municipal body, yet it is under the administrative control of Directorate General Defence Estates (DGDE), New Delhi and Principal Director, Defence Estates, Southern Command, Pune.

The Cantonment Board consists of eight elected Members, three nominated Military Members, three Ex-officio Members (Station Commander, Garrison Engineer and senior executive Medical Officer), one representative of the District Magistrate. An officer of the Indian Defence Estates Services which is a central civil service is posted as the Chief Executive Officer (CEO) as well as the member secretary of the Board. The board is headed by the President Cantonment Board (PCB) who is the Station Commander and also presides over the meetings of the cantonment board. The term of the elected Members is of 5 years. The Vice President is elected from amongst the elected.

As a local municipal body, the Cantonment strives to ensure that the residents receive all the necessary facilities such as education, sanitation, public health, street lights water supply and birth and death registration.