Dixit Wada is to be found just opposite Gurusthan. Work on the building began with Baba's permission in late 1910, the year after Dixit had taken his first darshan of Baba and been so touched by him. The building took about four months to complete and was inaugurated on Ramnavami the following year. Dixit lived in a modest room on the first floor and generously kept the rest of the building, including a small dining hall, for the use of visiting pilgrims. Many people benefited from the facility - Hemadpant, author of Sri Sai Satcharitra, always stayed here when he was in Shirdi and the wada is mentioned several times in the literature. Baba sometimes sent people to the wada to attend the parayana that Dixit did every day and puja was also conducted regularly. It was while lying on the verandah here that Sri Bhishma conceived the idea of celebrating Ramnavami, a festival that grew in size each year and is one of the grandest events in the Shirdi calendar.

Hari Sitaram Dixit, better known as Kakasaheb Dixit, was a close and exemplary devotee of Sai. He came to Baba in 1909 as an influential lawyer, active in politics, through his good friend Nana Chandorkar. While studying in London, Dixit had injured his leg in a train accident which left him limping and lacking in confidence. It was ostensibly for his recovery that Nana persuaded him to visit Sai Baba. How this trip came about and the beautiful way in which Baba arranged it, with Shama as his escort, is described in the Sri Sai Satcharitra, Ch. 50. Upon having Baba's darshan, Dixit forgot why he had come and reported that the handicap of his leg was nothing compared to the limitations of his mind.

Baba apparently once asked Dixit, "Why are you anxious? All care is mine."Dixit accordingly entrusted all responsibility for his material, physical and spiritual welfare to Baba. In each area he received ample and dramatic help, including being saved from a near fatal fever and unexpectedly getting last minute relief from a huge debt. There are many inspiring instances of his deep devotion to Baba and of Baba's response. Baba once promised that he would "take Kaka in a vimana" (i.e. secure him a happy death). This transpired in 1926 when Dixit passed away peacefully while travelling on a train with some close fellow devotees, as he was fondly recalling the greatness of his beloved gurudeva.

Dixit bequeathed part of the wada to the Sansthan and later it was given the whole building. Until the mid-1990s the building was used as a canteen. A small part of it is now open as a reading room. In a recent extension to the wada a few of Baba's things have recently been put on display in a small museum with a sign above the door: "Museum Hall". The Sansthan is planning to expand the display.