The Lamahi Eye Hospital was established in 2002 as a satellite weekly clinic of Rapti Eye Hospital in Deukhuri, Dang. It was upgraded from a weekly clinic to a Primary Eye Care Centre on 9th September 2009. Lamahi Town Development Committee, a local authority, provided 2.88 acres of land for the upgration of the secondary level eye hospital. This project was constructed with the support of NABP-Norway and the foundation stone was laid on 23rd November 2010 after which the construction began and was completed in 2012.

Having a large catchment area, it aims to provide eye care services to the people of Rolpa,Pyuthan, Arghakhachi, as well as part of the Banke district. The Lamahi Eye Hospital is located in the heart of Lumbini Province which is centrally located between Chhanda (Kalebahu)-Narayani Eye Hospital, Bahadurgunj and Rapti Eye Hospital, Tulsipur. It is close to the Indian border, which is only 33 kilometers away from Lamahi. It has one referral center located at Koilabas, which is near the Indian border and is a very convenience to Indian patients.