The ship was laid down by Swan Hunter & Wigham Richardson at Wallsend-on-Tyne, England, on July 8th, 1933 alongside HMS Phaeton. She would be launched on September 26th, 1934 by the wife of Stanley Bruce, former Prime Minister of Australia and the serving Australian High Commissioner to the United Kingdom. Sydney was commissioned into the RAN on September 24th, 1935, drawing her ship's company from Brisbane, which had been decommissioned earlier that day.
Following the announcement that Australia was purchasing a British-built cruiser, there was criticism, primarily from the Opposition of the day, stating that such a warship should be built using Australian resources and labour. Several reasons were given in reply for acquiring British-built cruisers instead of Australian-made: the ship was already close to completion, the pending threat of war meant that there was not enough time to train Australians in the necessary shipbuilding skills, and that of the two cruisers built in Australian shipyards, one (HMAS Adelaide) had taken seven years to complete.
Early World War II
In 1942, the Sydney was part of a battlegroup led by the Hood escort several refitted dutch destroyers to Surabaya when the battlegroup nearly ended up in a battle with a battlegroup led by the battleship Yamato. After learning that the Yamato was in the area, the battlegroup changed direction and took a different course to Surabaya while the Hood stayed behind to serve as a distraction.