Access to the site was difficult; it was eventually reached overland and construction of the Cape Otway Lightstation began in 1846 from stone quarried at the Parker River.

[6] These included the Marie (1851), Sacramento (1853), Schomberg (1855), Loch Ard (1878), Joseph H. Scammell (May 1891), Fiji (September 1891) and the Casino in 1932.

The first American vessel sunk during World War II, the SS City of Rayville, was also sunk off the Cape by a German mine in 1940, which sank less than 24 hours after the British Ship S.S. Cambridge off Wilsons Promontory.

The lightstation was decommissioned in January 1994 after being the longest continuous operating light on the Australian mainland.

It has been replaced by a low powered solar light in front of the original tower[3] whose focal plane is at 73 m above sea level.