Historic Sydney Harbour Island To Be Sold After Century Of Restricted Access

Spectacle Island in Sydney Harbour has been listed for sale as part of a federal defence property divestment program covering dozens of surplus sites across Australia.

The island, located near Drummoyne, has been under restricted access for more than a century and was previously used for military purposes including gunpowder storage and naval munitions handling. Established in 1865, it later housed elements of the Royal Australian Navy’s heritage collection before becoming vacant in 2023 following the relocation of materials to facilities in Sydney’s east.

The Defence Department has identified the island as no longer serving a strategic military function following an audit of its national property portfolio. The broader divestment program includes 67 sites and is expected to generate multi-billion-dollar proceeds, although remediation and relocation costs across the portfolio are also projected to be substantial.

Spectacle Island contains heritage-listed buildings that have deteriorated in recent years, and any future use of the site would be subject to conservation requirements and regulatory approvals. The scale of remediation work required has been identified as a key factor in determining potential future uses, with contamination and structural condition issues expected to limit redevelopment options.

An Aboriginal land council has sought consideration for the island’s return to traditional custodianship, contributing to ongoing discussions about the future management of historically significant defence sites. Heritage stakeholders have also raised questions about long-term preservation and public access, with some advocating for models of adaptive reuse similar to other harbour islands that have been repurposed for cultural and public use.

Possible future custodianship options include management by the Sydney Harbour Federation Trust, which oversees several former defence and industrial sites in the harbour. The island’s sale has prompted debate over whether privately led redevelopment, public ownership, or cultural management would best balance heritage protection with long-term maintenance needs.

The timing and structure of any sale have not been finalised, and the island is expected to remain in Commonwealth ownership until formal divestment processes are completed. Discussions around its future are continuing alongside the wider federal program to reduce the Defence estate and reinvest in priority military infrastructure.