The original plan of the new project was chalked out by Guru Amar Das and conveyed to Ram Das for execution. The latter was given guidelines for the location of the site and was instructed to found a village, to build a house for himself, to dig a tank and to develop the centre gradually into a city. Arrangements were made for money and assistance. Some intelligent, experienced, devoted and elderly Sikhs were instructed to assist Ram Das to implement the project. It is to be noted that Guru Ram Das was not new to this project of construction. He had helped Guru Amar Das to excavate the Baoli (well with stairs) at Goindwal and had a considerable experience of handling a construction project.
The project was executed by Guru Ram Das then Bhai Jetha. A large Sikh Sangat came forward for voluntary service. A number of labourers were also engaged. Hundreds of people from nearby areas came to the site. The inauguration was formally made in the traditional Indian style.
First of all a boundary line of the settlement was drawn. The foundation was laid by Guru Ram Das and the village was named Ram Das Pur/Ram Das Pura. Opinions vary on the date of the founding of Rain Das Pur. Probably the foundation of the centre was first laid in A.D. 1573 after the completion of the Boali at Goindwal, where Guru Ram Das was engaged on a responsible assignment. However, the popular view is that it was done in 1577.
The construction of the new centre was started with great enthusiasm. Some huts and houses were built Then the excavation of the tank (later named Santokhsar) started. When a portion of the project was completed, Bhai Jetha went to Goindwal to pay his homage to Guru Amar Das and report the progress of the work. This time Guru Amar Das directed Ram Das to dig another tank at the low level area near the site of the tank under construction.’ On his return to the Chak, Ram Das located the site for the second tank surrounded by a large number of Ber (Jujube) trees.
The construction of the second tank (later named Amrit Sarowar) started under the personal supervision of Ram Das. According to Giani Gian Singh the digging of the tank commenced on 7 Kartik, Samvat 1630 BK. (Friday, 6 Nov. 1573). A large number of labourers were engaged. Many Sikh devotees came to the Chak to participate in the Sewa (service) of the tank. The digging work continued for some months. Simultaneously with the construction of the tank all care was taken to develop the village Chak. Fifty-two types of caste-groups from Patti, Kasur and Kalanaur were called to settle here for ensuring regular supply of essential commodities to the settlers. A market called Guru Ka Bazaar was also established. Some wells were dug for water supply. A number of rich sarafs (bankers) and banjaras (traders) settled down in the town
The construction work of the tank and the town was going on smoothly. But Ram Das had to rush back to Goindwal at the call of the dying Guru Amar Dass while the work was in progress. The work was resumed on return of Guru Ram Das in AD. 1577. The construction of both the tank and the town was completed in the same year.
On the completion of the project the Guru called local Khatris (business community) and told them to take charge of the holy place. But they humbly pleaded their inability to perform religious duties and requested the Guru to engage some Brahmins and Fakirs (mendicants) for this job. But the Khatris sought the blessings of the Guru for kirt and barkat (blessings in their professions), which were granted.
The Guru and his disciples were thrilled at the completion of the new pilgrimage centre. Guru Ram Das composed beautiful verses in glorification of the Sarowar, making an injunction upon his followers to take bath in the holy tank and meditate here onHan Nam (the name of God).
Soon after its foundation the tank acquired a reputation for sanctity and became the headquarters of the Sikhs.