Since 1778 it was divided onto small flats and started serving as a hostel for students, owned by Marcin Nikuta. Converted into a military hospital by the French in 1806, between 1812 and 1817 it was abandoned and gradually fell into disrepair. During the November Uprising it was bought by the Polish government and refurbished to become a military hospital once again.
Turned over to civilian authorities in 1836, it continued to be a hospital until 1859, when it was bought by the Musical Institute. It was there that both Stanisław Moniuszko and Ignacy Jan Paderewski received their education. In late 19th century an additional story was added and in 1913 a new, much larger seat for the institute was built adjacent to the palace.