Positioned less than 500 metres (1,600 ft) from the 49th parallel along the Canada–United States border,[2] it is located at the southwestern end of a 2-kilometre (1.2 mi) causeway that juts out into the Strait of Georgia off the mainland at the community of Tsawwassen.

Despite concerns of rough seas and bad weather, the favoured site soon became the area offshore from the Tsawwassen First Nation reserve.

Construction of the terminal began in 1959, after BC Transportation Minister Phil Gaglardi, on divided engineering advice, selected the site.

In 2003, the Tsawwassen First Nation filed legal action in the BC Supreme Court over the destruction of the foreshore and other concerns caused by the impact of the terminal and the nearby Roberts Bank Superport.

On May 1, 1990, a connection from Tsawwassen to Nanaimo called the "Mid-Island Express" was established,[8] providing the fastest surface connection between Northern Vancouver Island and the border with the United States at Blaine, and, since the opening of the South Fraser Perimeter Road, to the Fraser Valley and points east.