It replaced the hotel that was originally constructed on the site in 1854 for Nicholas Paterson and Anthony Cornish.

[3] Burwell also designed the Central Chambers, Victoria Pavilion, Fowler's Warehouse, Owston's Buildings and Marmion House.

[4] The construction was undertaken by William Reynolds and was carried out in stages so that the hotel could continue to trade.

In 1923 the Swan Brewery purchased the hotel from William Padbury, retaining ownership of it until 1977.

In 1990 Elders IXL purchased the Matilda Bay Brewing Company (formerly Brewtech Ltd),[5][6] in a deal that valued Matilda Bay at more than A$50 million,[7] selling the hotel to the Australian Leisure and Hospitality Group (ALH), a subsidiary of Woolworths Limited, who subsequently closed the micro-brewery operations at the hotel for a short time after 2010, however the micro-brewing has since resumed.