It was described in 2009 by Alec Wood,[1] and is related to the Northern Hemisphere species Cortinarius violaceus.

[2] The type specimen was collected along Higgins Creek in Kioloa State Forest near Batemans Bay in southern New South Wales on 22 June 1980.

The cap surface is dry and covered with fine scales or hair.

The stipe turns dark blue when handled or touched because of the violet universal veil.

[2] The fruit bodies of Cortinarius kioloensis appear in autumn and winter (April to July) under Eucalyptus and Allocasuarina in southeastern Australia and Tasmania, and in association with Leptospermum in New Zealand.