Australia had administered the former Germany colony of Nauru since its capture in 1914, with the except of the period of Japanese occupation during World War II.

[3] Led by head chiefs Timothy Detudamo and Hammer DeRoburt, the NLGC began to seek greater autonomy for Nauru and eventual independence, which was initially resisted by Australia due to concerns over the future of the British Phosphate Commission (BPC).

[6] A final round of negotiations held in Canberra in April 1967 resulted in the Australian government agreeing to full political independence and a staged transition to Nauruan ownership of BPC assets.

[11] Section two of the act authorised the Australian government to fix a date for "Nauru Independence Day", which was subsequently set as 31 January 1968 following consultation with Nauruan leaders.

Celebrations for Nauru's Independence Day took place on the island on 31 January 1968, with Australian governor-general Richard Casey and UN under-secretary-general Issoufou Saidou-Djermakoye in attendance.