Constructed on the site of the Boilerhouse in 1908, The Derby Castle Goods Shed was fitted with interior and exterior platforms for road traffic and goods loading/unloading equipment. The building was used in this function until 1966, whereupon the ceasing of M.E.R Goods Traffic it became a store.
It survived in this format until 1988, when it was rebuilt into the new Paint Shop. A partition installed in the centre between the goods platform and the shed road in the mid 1990s.
In 2014 the Manx Electric Railway Museum was installed in the building interior, housing a variety of exhibits and artefacts from throughout the railways life, along with information boards about its history and rolling stock. The shed road is still used for the painting of rolling stock, and in the summer usually houses either Car No.1 or No.2.