The construction time of Koneswaram has been estimated by comparison between carved reliefs on the temple's ruins, the literature on the shrine and the inscriptions commonly used in royal charters from the 5th to 18th centuries. Koneswaram was likely founded in 400 B.C., although its exact date of birth remains vague. The evidence extant attests to the shrine's classical antiquity. Construction of Hindu temples was made possible due to the prevalent faith amongst the locals and mercantile communities in the region during the Sangam period. Kaviraja Varothiyan's Tamil poem inscribed on the Konesar Kalvettu, the 17th century stone inscription chronicle of the temple, gives the shrine's date of birth as circa 1580 B.C. Archaeologists point to its initial phase consisting of a rock cave, multilayered brick shrine style popularly constructed to Tamil deities of a range of faiths during the Sangam period.
Contemporary historians such as S. Pathmanathan and Paul E. Peiris suggest Koneswaram temple has a recorded history from 300 when it finds mention in the Vayu Purana. Peiris notes that Koneswaram was one of the five recognized Iswarams of the Hindu deity Shiva in Lanka before the sixth century B.C.; a widely famous centre of deity worship long before the arrival of the mythical exile Vijaya to the island, attributed to the period 543—505 B.C. Koneswaram is the easternmost shrine of the Iswarams, the others being Naguleswaram, Thiruketheeswaram, Munneswaram and Tenavaram . The historian Diogo de Couto of the 16th century adds Ramanathaswamy Temple, Rameswaram to this group of principal temples in the region most revered on the Indian subcontinent.
Other writers point to the worship of Eiswara by mythical royals on the island like Kuveni before the exile's arrival. Pathmanathan differs from Peiris in his view on the shrine's birth, however, stating that Koneswaram temple was most likely established as a Hindu shrine by the mercantile communities that frequented the island from the fourth-century B.C. Kalinga region in India, where another temple dedicated to Shiva in the form Gokarnasvamin at Mahendra mountains is found. The Yalpana Vaipava Malai, an 18th-century Tamil chronicle connects the figure Vijaya and seven hundred of his followers to the shrine, stating they extensively repaired the five Iswarams upon their arrival to the island, before mixing with native tribes on the island forming matrimonial links with the Tamil kingdom through Pandyan queens.
The Encyclopædia Britannica currently appears to follow this view, although, in volume 10 of the encyclopaedia, printed in 1974, the shrine's establishment is attributed to Tamil migrants. Encyclopedia Americana and New International Encyclopedia note that early Tamil rulers erected the temple of a thousand columns on the hilltop. King Elara Manu Needhi Cholan in 205 B.C. and the prince Kulakottan of the Chola Dynasty extensively renovated the Koneswaram temple and the Kantalai tank, responsible for irrigating plains belonging to the shrine. The latter's reign is alternatively attributed to between 1580 B.C. and 1250.
Due to royal patronage by various Tamil dynasties from the early classical to the medieval era, the temple flourished in the early centuries of the First Millennium. Hindus built at least three great stone temples with gopura on Swami Rock during Koneswaram's zenith, one to Vishnu-Thirumal, one to the goddess and the principal temple of the complex to Lord Shiva at its highest eminence.