This Gurdwara is situated at a distance of 19 Km from Taran Taran City and 43 Km Southeast of Amritsar City in town Khadoor Sahib.

Close to Gurdwara Sri Darbar Sahib is a square domed marble pavilion called Gurdwara Sri Khaddi Sahib, also known as Gurdwara Killa Sahib. This was a weaver's pit, or Khaddi in Punjabi, which is the loom of a cloth weaver. This was where Baba (later Guru) Amar Das, carrying a pitcher of water for Guru Angad during a pitch dark night, stumbled against a killa or peg. Despite his fall, he succeeded in saving the water filled pitcher. The noise of the fall awakened the weaver who suspected a thief.

When the weaver's wife heard a voice uttering 'Japji' she told her husband that it was no thief but the poor, mad and homeless Amar Das, the aged servant of Guru Angad. When the incident came to the notice of Guru Angad, he remarked, "Amar Das is not homeless, mad and lowly. He shall be the home of the homeless, and honour of the unhonoured, the strength of the strengthless, the support of the unsupported, the shelter of the shelterless, the protector of the unprotected, and the emancipator of the captives." Afterwards, it was the weavers wife that became mad. At the touch of Guru Angad's foot the killa turned green and grew into a Karir tree. With time, the tree has dried out but is still preserved in a frame for visiting Sikhs.

The Third Sikh Guru, Shri Guru Amar das Ji served Second Sikh Guru, Shri Guru Angad Dev Ji for 12 long Years by bringing water from River Beas for Guru Angad Dev Ji to have bath. One Day while bringing water, Guru Amar das Ji fell down after hitting the Peg of a Weaver, whose house existed at this place (the house was later on purchased by Guru Ji). The Weaver upon hearing noise asked his wife," Who is there?" His wife upon hearing the voice of recitation of Holy 'Japji Sahib' replied, " Who else might be there. he must be Amroo Nithana?" The Weaver's wife also uttered some objectionable words against Guru Angad Dev Ji. Guru Amar Das Ji said," Mad, You can say anything to me, but do not say anything against my Guru Ji". The Weaver's wife immediately went mad and the Peg turned Green by the touch of Guru Amar Das Ji's Holy feet. The Peg has been still preserved here. Guru Angad Dev Ji gave 12 blessings to Guru Amar Das Ji :

"Guru Amar Das You are the home of the homeless,
Guru Amar Das You are the Shelter of the Shelterless,
Guru Amar Das You are the the Strength of the Strengthless,
Guru Amar Das You are the honour of the honourless,
Guru Amar Das You are the Support of the Supportless,
Guru Amar Das You are the help of the helpless,
Guru Amar Das You are the Anchor of the Anchorless,
Guru Amar Das You are the Protector of the Protectionless,
Guru Amar Das You are the Supreme hope of the hopeless,
Guru Amar Das You are the bestower of bread to the World,
Guru Amar Das You are the Conferor of all Nine treasures (Nau Nidhian),
Guru Amar Das You are the abode of the abodeless,
Guru Amar Das all glory to You"

Guru Angad Dev Ji installed Guru Amar Das as Third Sikh Guru in the Year 1552.