The church is located on the shores of Lake Myachino, 3 km southwards from Novgorod. It is the object of UNESCO World Cultural Heritage. Church of Annunciation is the earliest in Novgorod sample of new church building type, which would become canonical in the last quarter of the 12th – the early 13th cc. According to the chronicles, Archbishop Ilya and his brother Gabriel set the wooden Church of Annunciation and established the monastery in 1170. In 1179, within one season, this church was replaced by a stone one; and in 1189 its walls were painted with frescoes. Monastery of Annunciation was one of the largest and richest in Novgorod. Despite the name, the church didn't belong to Arkazhsky monastery that arose later. The name appeared due to the nearby village Arkazhi.

In the northwestern corner, the aisle of Novgorod Archbishop Theoctistus is fenced off and consecrated. Church murals are highly interesting for comprehension of the important philosopho-theological problems of the time and allow to feel singularity of spiritual intentions that existed in Novgorod society in the second half of the 12th century. It is a significant and progressive artistic layer for Novgorod culture of the past decades of the 12th century.