In 30th century B.C. Egypt, the Eye of Ages is first seen as a jewel-like relic of mystic power when it is recovered from the wreckage of a crashed spaceship by a local barbarian tribe, the Sandstormers. It was in fact a highly advanced technological device capable of bestowing precognitive abilities unto its bearer with the possibility of unlocking the very secrets of the universe, a powerful instrument used by the conquering time traveler Nathaniel Richards. It was able to foretell the immediate future to En Sabah Nur-- the mutant that would become known as Apocalypse-- and later proved a valuable item in his meteoric rise to absolute dominance of Ancient Egypt.
For reasons unknown, the Sphinx, not merely an ancient monument, but in actuality, Nathaniel Richard's time-traveling ship, suffered a catastrophe that caused it to crash in the deserts of Egypt where Baal of the Sandstormers tribe recovered it. He discovered the ship's injured human pilot and gave him shelter whilst he recuperated, dubbing the mystical stranger Rama-Tut, the "Visitor from Beyond the Sun." Baal was shown a vision of the future by the Eye and elected to hide it within the Hound of the Sands, a sacred cave constructed using part of Richards' crashed vessel, along with prophetic depictions of what it had shown him.
Nearly 20 years later, Baal would return to the Hound of the Sands with his adopted son En Sabah Nur to show him the artifact and reveal to the boy the story of his forthcoming. An unexpected tremor caused a cave-in wherein the pair were severely wounded. It was then the Eye gave En Sabah Nur a glimpse of his future- to overthrow Rama-Tut who had since established himself as Egypt's Pharaoh and become an unstoppable conqueror himself. En Sabah Nur then set off to fulfill his destiny.
Ultimately En Sabah Nur's intentions were discovered and the Pharaoh offered him the position as his heir (it having been revealed that Rama-Tut sought to gain the loyalty of the immortal mutant he knew would one day conquer the world, thereby making him the most powerful being on the planet). An enraged En Sabah Nur turned his wrath on Rama-Tut and eventually chased him into the Sphinx, where Tut ended up battling a time-displaced Fantastic Four. In the wake of the battle, the Pharaoh's power hungry general Ozymandias also made his way into the Sphinx intent on deciphering the secrets of its advanced technology and use it to ascend to the position of master of Egypt for eternity. In the chamber which formerly housed the of the Eye of Ages, he encountered En Sabah Nur who ironically used the power of the Eye to bestow upon Ozymandias all the collective knowledge of time at its disposal in an instant, the massive shock of which proved too much for his mind to withstand. His psyche shattered, the warlord's body was transformed into one of living sandstone, also being granted the Eye's power to see the events of the future. It is from this moment forward that Ozymandias became cursed to forever follow En Sabah Nur and record his prophetic visions, as well as the details of his master's conquests, as the eternal personal scribe of Apocalypse.
Whoever wields the Eye will be granted visions of the future. Its potential is not limited to mere fortune-telling, though, as with prolonged use, a skillful bearer could eventually unlock the vast knowledge and cryptic secrets of space and time, potentially becoming all-powerful. Its power also seems capable of being utilized for a variety of other effects, as it was able to somehow transform Ozymandias into living stone, although none of these effects are known.
The Eye of Ages seems to have completely transferred some or all of its power to Ozymandias, thus explaining his ability to see into the future and his apparent telekinetic control over stone.
The Eye of Ages is presumably not only a mystical device capable of foretelling future events, but also likely the Sphinx's main computer as it stores all information it gathers about the timestream. The Eye also apparently acts as some sort of power source to the alien ship as well.