This temple has Hindu and Buddhist history. Buddhism was practised here till the 10th century AD. But after the fall of Buddhism the devotion of Manjusri and Avalokiteśvara continued in this region. The Nath cult was embraced towards Buddhism and continued there Tantric Shiva tradition as well. As a result many Buddhist temples came in Hindu vortex. According to M. Govinda Pai this temple was known as Kadri Manjunatha where is Manjunatha relates to Shiva and Kadri is derived from Kadri Vihara which was Buddhist monastery of Vajrayana cult.
King Kundavarma of Alupa dynasty has left an inscription on the base on Avalokiteśvara image stating he was devotee of Shiva. This image was not of Buddha, but of Bodhisattva who was being worshiped as integrated form of Shiva. Further M. Govinda Pai has concluded this was center of Bodhisattva Manjusri's cult. And later on this Bodhisattavs were identified as Saivite deities.Shiv linga and Bodhisattva were worshipped together for centuries at this place until this was converted completely to Saivite temple. Knadarika Vihara provides firm inscriptional evidence for this transformation. After the 11th century Brahimins took forcible possession.
Now, the chief deity of this temple is Manjunatha. There is a shiv ling on him. The statue of Lokeshwara in the seated positionwith three faces and six arms is tipped to be the best bronze statue in India. It is about 1.5 meter tall.
There is a natural spring at an elevated location at the back of the temple. It is called Gomukha. The water from this spring is let into 9 ponds of different sizes adjacent to it. People visiting the temple wash themselves in these ponds before entering the main temple.