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The establishment of the Võro Institute was first suggested by the active advocates of the Võro movement, which emerged in the late 1980s. By the mid-1990s it was clear that the movement required state support to be viable and could not be sustained exclusively on a voluntary basis. The Võro Institute was established by the Estonian Government in 1995 as a state research and development agency. Today the Võro Institute is administered by the Estonian Ministry of Culture. Its activities are regulated by The Law on the Regulation of Scientific and Development Activities and its statute. The academic board and its chairperson supervise the projects undertaken by the Institute.

The Võro Institute is run by the Director, who is appointed to a five-year term by the Minister of Culture. In addition to the permanent staff, eight researchers and specialists agree to short-term contracts for more extensive projects.

The Võro Institute is funded from the state budget; additional support comes from different foundations and programs. The institute has been the beneficiary of the Cultural Endowment of Estonia, the Gambling Tax Board and “The Southern Estonian Language and Culture” government program.