In October 1869, following criticism of the poor quality harbour light provided by a lantern on a post sited on the Pier Head, tenders were called for the construction of identical Lighthouses at Wollongong and Ulladulla. The lighthouse like Belmore Basin, was designed by E.O. Moriarty, Engineer-in-chief of the Harbour and Rivers Department. Moriarty also selected the site for the lighthouse, on the outer end of the 1867 
Eastern Breakwater which had been built up by stone taken from the excavation for the Basin and dumped. Moriarty was in charge of concreting the top of the breakwater once it had settled and for the concrete blocks that initially lay on the seaward side.
The lighthouse was the first prefabricated wrought iron Lighthouse made in Australia. The sections were made by Joseph Mather in Sydney during 1869 and erected on a bull nosed sandstone foundation. The lantern was manufactured by Chance and Co., near Birmingham England. The lighthouse became operational in 1872, using an oil lamp and coloured glass to produce a deep red light. Pilot Robert Houslar, assisted by two boatmen, was responsible for the operation of the lighthouse. The lights were changed over time including the conversion to gas in 1907 and a flashing electric light in 1945.
The Breakwater Light continued operating as a harbour light until it was extinguished in March 1974. Subsequently craft have been guided into the outer harbour by a flashing red light on a 5 metre high white post installed on the 1867 Eastern Breakwater in 1973, and a flashing green light on a 3 metre white post, visible for 3 miles, on the Northern Breakwater as well as two red leading lights on Brighton Lawn.
The responsibility of the Breakwater Lighthouse transferred to the Wollongong City Council in 1975 and a museum operated in the lighthouse briefly during the late 1970’s. The structure underwent a State funded, $100,000 conservation programme in 1999-2000, to restore the fabric and the light is occasionally switched on for celebratory events. The Breakwater Lighthouse is located within Port Reserve R180069 which is the responsibility of the NSW Department of Lands.
