[7] Before 1837 the area was briefly considered for the site of the colony's capital; a "special survey" was undertaken in 1839–40, with a sizeable township laid out at Currency Creek and land for a port with substantial warehousing on the river where Goolwa now stands.

It was later extended to Victor Harbor, allowing goods to move from river boats to ships, so that neither had to negotiate the Murray Mouth.

With the decline of the river trade Goolwa became dependent on local farming and fishing, as well as becoming a popular destination for holidaymakers from Adelaide.

The crisis prompted ongoing discussions with state and federal governments with the aim of releasing more water from upstream to ensure the survival of the river.

The low water level was exposing the river bed and scientific evidence warned of the devastating impact of acidification of the Lower Lakes region.

In late 2010 some gates on the Goolwa Barrage were opened for the first time in many years to allow fresh water to flow to the Murray Mouth.

Continued rainfalls combined with flooding upstream in New South Wales and Victoria led to massive flows down the River Murray, and by January 2011 all the gates on the Goolwa Barrage were open.

[11] At June 2018, the estimated urban population for Goolwa together with nearby Victor Harbor was 26,532,[12] having increased at an average annual rate of 1.07% year-on-year over the preceding five years.

[citation needed] Goolwa, along with the neighbouring towns of Middleton and Port Elliot and the city of Victor Harbor have in the 2000s enjoyed a nationally recognised "sea change" boom, with people moving there from more metropolitan areas for an improved lifestyle on the coast.