Visual knowledge obtained from our lifelong experience of the world plays a critical role in our ability to build short-term memories. We propose a mechanistic explanation of how working memory (WM) representations are built from the latent representations of visual knowledge and can then be reconstructed. The proposed model, Memory for Latent Representations (MLR), features a variational autoencoder with an architecture that corresponds broadly to the human visual system and an activation-based binding pool of neurons that binds items’ attributes to tokenized representations. The simulation results revealed that shape information for stimuli that the model was trained on, can be encoded and retrieved efficiently from latents in higher levels of the visual hierarchy. On the other hand, novel patterns that are completely outside the training set can be stored from a single exposure using only latents from early layers of the visual system. Moreover, the representation of a given stimulus can have multiple codes, representing specific visual features such as shape or color, in addition to categorical information. Finally, we validated our model by testing a series of predictions against behavioral results acquired from WM tasks. The model provides a compelling demonstration of visual knowledge yielding the formation of compact visual representation for efficient memory encoding.