The battle concluded in a royalist victory that delayed the incorporation of Chiloé into Chile to 1826 when a new invasion was launched.

In 1820 Lord Cochrane, with the newly created Chilean Navy, had disembarked William Miller in Chiloé to capture the island for Chile.

Cochrane's hoped to repeat the success at Valdivia where he with only 350 men had captured the largest Spanish defensive complex in Chile.

William Miller's 60-men strong expedition suffered heavy casualties in the Battle of Agüi and had to retreat back to the ships.

The troops occupied without resistance the village of Chacao and then continued south and disembarked in the town of Dalcahue.