[1] In 1938, the Australian Commonwealth Naval Board (ACNB) identified the need for a general purpose 'local defence vessel' capable of both anti-submarine and mine-warfare duties, while easy to construct and operate.

[6] The need for locally built 'all-rounder' vessels at the start of World War II saw the "Australian Minesweepers" (designated as such to hide their anti-submarine capability, but popularly referred to as "corvettes") approved in September 1939, with 60 constructed during the course of the war: 36 (including Colac) ordered by the RAN, 20 ordered by the British Admiralty but manned and commissioned as RAN vessels, and 4 for the Royal Indian Navy.

[1] She was launched on 30 August 1941 by Miss M. Heady, senior lady on the staff of Morts Dock and Engineering, and commissioned into the RAN on 6 January 1942.

[1] This continued until December 1942, when Colac and sister ships Ballarat and Broome were ordered to support the Allied efforts to recapture Buna-Gona by embarking 762 Australian soldiers and delivering them as far into the Japanese-occupied Oro Province of Papua New Guinea as possible.

On 26 May, the ship suffered her first casualties of the war, two hits from Japanese shore batteries killed two sailors, wounded two others, and holed Colac at the waterline.

[1] The corvette jettisoned stores, her depth charge payload, and replaceable pieces of equipment to avoid sinking and escape, and later limped to the Treasury Islands under tow for repairs.