The Suez Canal Administration Building (or Navy House) houses the administration offices of the Canal. Built by Khedive Ismail in 1869, this palace is also known as "the British Navy Base". This graceful building lies on the bank of the Suez Canal. It was erected to serve in hosting and receiving the Khedive's guests and rulers coming from the whole world to visit Egypt under his reign. Britain bought the palace in the World Wide War to be its base from which it can lead the British Army in the Middle East region. But they left it when Egypt gained independence in 18th June, 1956.
After the last British soldier stepped out off the country, President Gamal Abdel Nasser put the Egyptian flag on the palace announcing the autonomy and independence of the Canal and the whole country.
You can get more information here.