The AIIL was set up in keeping with the spirit of the United Nations General Assembly Resolution 2099 (XX) of December 20, 1965, to contribute towards a better knowledge of international law as a means of strengthening international peace and security and promoting friendly relations and cooperation among States. In addition, it is meant to contribute to strengthening the rule of law both domestically and internationally within the African continent.

Considering the increasing impact of international law on political and economic activities on the African continent and specifically the growing role played by international law and the law of the African Union in the municipal legal systems of African States, the creation of such an institute was seen as being of critical importance for strengthening the rule of law and promoting economic and political integration among African States. The establishment of the AIIL was initiated by the African Foundation for International Law, on the proposal of one of its founders, Judge Abdulqawi A. Yusuf of the International Court of Justice.

The Government of the United Republic of Tanzania, considering that this Institute will benefit all African States as well as the AU Commission, formally proposed its establishment to the AU Executive Council at its Twentieth Ordinary Session (January 23-27, 2012) in Addis Ababa. Consequently, the decision to endorse the establishment of the Institute was made by the Assembly of the African Union at its Eighteenth Ordinary Session (January 29-30, 2012) in Addis Ababa. A year later in its Resolution 67/91 of January 14, 2013, the General Assembly of the UN took note of the establishment of the AIIL and encouraged the Codification Division of the Office of Legal Affairs to cooperate with the Institute in the implementation of the relevant activities under the Programme of Assistance.

The Headquarters of the AIIL is located in Arusha, United Republic of Tanzania, as stipulated in the Seat Agreement signed in Dar es Salaam on March 12, 2013 by Hon. Bernard Kamillius Membe, Minister for Foreign Affairs and International Cooperation and Ambassador Sani L. Mohammed, Acting Rector of the AIIL.