As there were so many artistic shows or performances taking place on the island, the people felt the need for a permanent place appropriate to receive all these events. In compliance with the population’s request, in 1880 a company was founded especially for the purpose of the construction of a theatre worthy of the city of Funchal. Later the municipality took over this project and that company was dissolved. The architect responsible for the project was very much inspired by the Milan Scala, a theatre model in vogue throughout Europe at that time.

In 1887 the Dona Maria Pia Theatre, later named Teatro Municipal Baltazar Dias, was presented to the public with an inaugural performance.