More popularly known as Underground Virupaksha Temple, this is situated to the west of the Danaik's Enclosure. A large broken loose slab containing an inscription which records a grant to the temple of Prasanna Virupaksha by King Krishna Deva Raya on the occasion of his coronation.

The temple faces east and is much below the present ground level. The temple is much dilapidated. The large and wide two-tiered gupura on the east has no superstructure extant. The main sanctum has many axial mantapas. The easternmost of these is a pillared seven-aisled maha-mantapa with a tall and tapering dipa or dhwaja stambha protruding through its roof top. To the north and south of the mantapa are the remnants of corridor with pillars of the heavy early cubical type as in Ganagitti Temple.

The floor of the maha mantapa, the other axial mantapas as well as the main sanctum are under water. The maha-mantapa leads to the three-aisled ardha-mantapa, the large cubical pillars of which are also of an early type, with cubical base, octagonal shafts, a thin pionted kumbha and large idol. The kalyana-mantapa at the south-west corner of the temple is an ornate one in the typical Vijayanagara style.