David Leighton had purchased it from Patrick Marmount who was said to have received it as compensation from Governor Lachlan Macquarie for land resumed for the new Military Hospital.

Paton constructed the existing hotel c. 1842 on the corner of Lower Fort and Windmill Streets from sandstone excavated from the Argyle Cut.

Rumours persist that the labyrinthine stone cellars of the Hero of Waterloo contain a concealed entrance from which a "smuggler's tunnel" had been dug to Darling Harbour.

[2][1] The Hero of Waterloo, located on a prominent corner site in the centre of Millers Point, is a three-storey building designed in the Old Colonial Regency style and constructed in ashlar stone.

[2] The North elevation has a large shopfront with Georgian beaded timber panelling to the bottom half, a door with stone and concrete steps, a cellar carriage way door, and the rest of the ground and first floor is made up of 12 pane Georgian windows separated by stone pilasters of extremely subtle relief all under a simple parapet with a central feature that is little more than a raised section of wall.

The Hero of Waterloo is one of the earliest remaining hotels in Sydney, being of simple yet strong vernacular design and an excellent example of an 1840s city pub.

The hotel retains substantial evidence of its original form and is an integral component of the Millers Point precinct, an area demonstrating the changes of over a century of Sydney life and which has remained virtually unchanged since the 1920s.