The name refers to "slow waters", describing the local arc in the Yarra River.
In 1954 Cistercian Monks from Ireland purchased one section of the property comprising 1,000 acres (4.0 km2), including the large house built by David Syme for his daughter and established Tarrawarra Abbey of the Order of Cistercians of the Strict Observance (Trappists).
Since that time the community has built additional buildings including a large library in 2006.
The monks support themselves by operating a beef farm and by Tarrawarra Eucharistic Breads.
Another section of the original estate today is TarraWarra Estate winery, which opened in 1983 and which produces chardonnay and pinot noir, and the TarraWarra Museum of Art, which opened in 2000.