The place name Valli or Vali is a Ramayana name, and it is also a clear toponymic from "Vaeli", or "sand" in Sinhala. The Vishnu temple here was constructed around the 13th century or later, replacing the buddhist place of worship which was mentioned in the "Nampotha". It should be noted that Buddhist and Hindu cults co-existed easily, even when the rulers did not, and hence a Vaisnava tradition may have existed in early times as well. The deity of the temple is called Vallipura Azhvar. Azhvar names are common in Vaishnavite tradition.
Vallipuram (Sandy City) has a recorded history from the 2nd century BC, in the gold inscription of King Vasabha, where the local ruler is named as "Asagiri", a name confirmd in the Nelugala stone inscription (2nd Century BC) as well. The Buddhist list of holy places ("Nampotha") names it as "Vaelipura" or sand city. The exact details of the temple complex are not known, and the famous 'Vallipuram" Buddha statue was found in excavations below a subsequent Hindu Temple. Peter Shalk, a distinguished German Tamil Scholar, writes " Vallipuram has very rich archaeological remains that point at an early settlement. It was propably an emporium in the first centuries AD. From already dated stones with which we compare this Vallipuram statue, we can conclude that it falls in the period 3-4 century AD. During that period, the typical Amaravati-Buddha sculpture was developed". The Buddha statue found here at the Buddhist site was gifted to King of Thailand by the then British Governor Henry Blake in 1906. The descendants of Arya Chakravarti married into Kalinga Magha family and created a dynasty of Singai-Aryans and ruled from Vallipuram and renamed it as Singai Nagar. However, no historically useful objects, e.g., inscriptions, art or literary works were left by these rulers, and Paranavithana and other historians claim that they paid tribute to the main ruler of the country. See also S. Paranavitana, ``Vallipuram Gold-Plate Inscription of the Regin of Vasabha. Epigraphia Zeylanica , 4 (1936) 229-236. A full discussion has been given recently by Karthigesu Indrapala, Evolution of an Ethnic Identity,(2005), and in an earlier work, 1965 where Dr. Indrapala argued for a flourishing pre-christian buddhist civilization in Jaffna, in agreement with Paranavithana, and Mudliyar C. Rasanayakam, Ancient Jaffna.