As part of the redevelopment of 50 ha (123.553 acres) of land at Darling Harbour, it was proposed to build a transport link to the Sydney central business district.

Sydney City Council preferred a light rail line, however in November 1985 Transport Minister Laurie Brereton announced a monorail would be built.

[2][3] Initially operated by TNT Harbourlink, the monorail opened on 21 July 1988 after a construction period of 26 months.

[7] The original operation hours were to be 06:00 to midnight, but after two years of operation patronage counts were half those expected, and planned stations at Market Street (to be named Casino, as part of the gaming venue planned to be built on the site) and Harbour Street (to be named Gardenside) were not built for some time.

The Government of New South Wales bought both the monorail and the light rail service from Metro Transport Sydney on 23 March 2012 to enable it to extend the light rail system without having to negotiate with the private owners, and to remove the monorail from the area near Haymarket required for the expanded Sydney Convention & Exhibition Centre.

It was originally intended for the system to operate automatically, but after a number of breakdowns soon after opening, it was decided to retain drivers, who occupied the first car of each train.

[4] Delivered in 1987, six trains of seven carriages were built by Von Roll Holding to the Type III specification.

TNT Harbourlink was criticised for failing to call emergency services until 5:40; by the time the fire brigade arrived at the scene, the passengers were en route to disembarking at a station.

[27] In July 1992, monorail services were suspended due to a fire in a wool store building which caused a wall to collapse 'within metres' of TNT Harbourlink's central control room offices.

[28] On 27 February 2010, at approximately 16:00, two monorail trains collided at the Darling Park station resulting in hospitalisation of four people.

[29][30] On 24 September 2012, just before 14:00, an Ausgrid failure in a local underground cable led to a complete shutdown of the system resulting in the need for cherry-pickers to come to rescue approximately 100 stranded passengers, a process which took several hours.

[31] Transport for New South Wales released a document called "Monorail Removal Project Interpretation Strategy" in July 2013.

Premier Barry O'Farrell said on 23 March 2012 regarding its removal:[32] This is good news for Sydney – it delivers certainty for business wanting to invest in the Darling Harbour precinct and allows the efficient development of the light rail network.

While it has been a controversial part of Sydney's history for more than 20 years, the monorail is reaching the end of its economic life and the NSW Government cannot justify costly upgrades like the purchase of new vehicles required to keep it running.

[13] Sixty steel beams were recycled to build a temporary bridge to take Brookhollow Avenue over Norwest station during its construction between 2014 and 2017.

[42] The Monorail system was used for scenes in The Saint: Fear in Fun Park and Mighty Morphin Power Rangers: The Movie, where one train set had "Angel Grove" painted on it.