Manuel Peña and his wife Esperanza Orellana, both prominent members of Tangier society at the time, decided to build a theater near the Grand Socco in Tangier. Diego Jiménez Armstrong, architect of a number of important structures in the city, was chosen as the architect. His design was realized by Construcciones Hidráulicas, under his supervision, and the theater opened in 1913, as is indicated in large tile decoration on the theater's edifice.
The interior decor was elaborate, with the material brought from Spain. The stage was constructed by carpenter José de la Rosa, and the ceiling painted by Federico Ribera.
By 1929 the theater had become the property of the Spanish government, and in 1974 it became the property of the city of Tangier, sold by Spain for the symbolic price of 1 dirham. It is currently abandoned and in a state of disrepair, but in June 2016 plans were announced to convert the building into a cultural center.
Albert, Rocío Rojas-Marcos. "El Gran Teatro Cervantes." In Tánger: La Ciudad Internacional, 142-50. Granada: Almed, 2009.