At the end of the terrible war of the Mahabharata, Sri Krishna retired to the forest to spend his last years on earth. The Yadavas , during a festival , being arrogant and drunk had  a fight and had killed each other, destroying the clan. The Lord was meditating under a tree when a poisonous arrow pierced his foot wounding and killing him. The hunter who had shot the arrow was none other than Vaali in his previous birth and had been re-born as Jara to avenge his killing at the hands of Lord Rama. All this had been preordained by the Lord. It was his way of bringing closure to karmic deeds.

The Pandavas on hearing this news rushed to the forest and witnessed the Lord leaving his mortal body. They carried the body to the shores of the Bay of Bengal and cremated the Lord there. The ashes were submerged into the sea. The heart, however, remained intact and glowed brilliantly. Jara, watching the proceedings from a distance, followed the brilliant lustre into the sea and finally emerged with a blue stone. He placed the stone in a cave and worshipped it, a practice continued by his descendants in utter secrecy. The stone in due course of time came to be known as Nila Madhava. Even the Gods descended on earth at night to worship the Lord in the form of Nila Madhava .

Around the same time, King Indradyumna, a legendary king of the Solar dynasty in Satyayuga, ruled the city of Avanti. He was a great devotee of Lord Vishnu and wanted to meet him face-to-face. The king came to know of incarnation of the Lord as  Nila Madhava and wanted to consecrate the extraordinary deity. He immediately sent out brahmanas in search of Lord Nila Madhava, but they all returned unsuccessful except for an astute priest named Vidyapati.

After traveling for a while, Vidyapati came to the house of a tribal chief called Visvavasu. Vidyapati stayed at the  Visvavasu house for a few days and eventually married his daughter Lalita. Vidyapati noticed that Visvavasu would go out every day around noon and would return to the house scented with fragrances of sandalwood, camphor, and musk. He then got to know from his wife Lalita  that her father  would go every day to worship Nila Madhava  inside a cave inside the dense forest.

Vidyapati pleaded with Visvavasu that he be allowed to have the darshan of  the deity. Visvavasu , his father-in-law gave  in to his  request , and took Vidyapati along with him  to have darshan of Nila Madhava  at the secret site. On the way , Vidyapati secretly marked the route to the cave where Nila Madhava was being worshipped. Once the mystery was revealed , Vidyapati escorted the  King Indradyumna to the spot but could not have the darshan of  the Lord because the  has disappeared from the site of worship . The infuriated king imprisoned Visvavasu and returned to his kingdom. After a few months, King Indradyumna became frustrated with not seeing Nila Madhava. He decided to lie on a bed of Kusa grass and fast until death. The Lord then came to him in a dream and told him that he would come floating from the sea in wooden form as Daru-brahman (the Absolute Truth manifested in a wooden form).

The King went to the shore and saw a huge piece of wood which had the impressions of a conch, club, disc, and lotus on it. Hundreds of  men and elephants tried to move the wooden log, but none succeeded. Finally, Visvavasu, who used to worship the Lord with simple forest flowers and roots, was called upon and he placed the Daru-brahman on a golden chariot and brought it home.It is said that Visvakarma, the architect of the gods, himself carved the deities in the guise of an old Brahmana. He undertook the task on the condition that he not be disturbed for 21 days. The old sculptor then took Daru-brahman into the temple and shut the doors to the outside world. After 14 days had passed, the king not hearing any sound from the artist’s tools became anxious and forced open the temple door. They found the unfinished images and found no signs of the carpenter.

The King did not see the sculptor, but instead, he saw the three forms of Lord Jagannath, Subhadra, and Lord Balarama. Their fingers and toes were unfinished. Thinking himself to be a great offender, the king decided to end his life. Lord Jagannath appeared to him in a dream and told the king that even though he had no material hands and feet, he accepted all the items offered by his devotees with his transcendental senses.He assured the king that he was eternally present in Nilachala in the form of Lord Jagannath and that devotees whose eyes were smeared with love would always see him as Syamasundara, the dark and resplendent Lord playing the flute.