The college was established in 1935 by the Sisters of Mercy (Parramatta) in a cottage at 6 Coast Avenue, Cronulla.

In 1959, the Sisters of Mercy purchased the college's current property at Burraneer Bay, which was officially opened and blessed in 1960.

In the early 1980s, the Sisters of Mercy moved out of the Convent, allowing the school to extend into this part of the building.

The emblem for McAuley is the lotus flower, which symbolises compassion, courage, mindfulness, peace, and wisdom.

Motto: Act justly, love mercy, walk humbly Mercedes ('mercy' in Spanish) house was named after the congregation of the Sisters of Mercy, which was established by Catherine McAuley in 1831 for the visitation of the sick, poor and the charitable instruction of women.