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 Inverell) 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] In early February 1943, Inverell was required to rescue the crew of a United States Army Air Forces Liberator bomber, which had crashed on Croker Island.

[1] Based in Morotai, Inverell was primarily used as a patrol vessel until the end of World War II, when she became involved in the transfer of Dutch East Indies territories from Japanese to Allied control.

[1] On 29 November, she left Morotai, and spent the next month operating off the coast of Queensland before arriving in Brisbane on 25 December 1945 and preparing for decommissioning.

[10][11] On 5 March 1952, Inverell and three other Bathurst-class corvettes (HMA Ships Echuca, Kiama, and Stawell) were transferred to the Royal New Zealand Navy.