The State Dockyard at Dykes Point, Newcastle was built by the New South Wales Government in 1942 during World War II. The dockyard was constructed using much of the plant and buildings from the former Walsh Island Dockyard and Engineering Works which had ceased operations in 1933. The dockyard launched its first vessel in July 1943. By 1945 it had built two vessels for the Royal Australian Navy and twenty-two vessels for the United States and had repaired six hundred ships. The dockyard closed in 1987.
As of 2009, the dockyard is proposed to be reutilised by Azzura Marine into a superyacht and large custom vessel construction facility.
In 2010, the southern roof of the former dockyard buildings still shows the faded, painted title "STATE DOCKYARD" when viewed from above.
As of 2011 the surviving State Dockyard built ships are the a lighthouse tender built in 1963 for the Commonwealth Lighthouse Service which is now a museum ship at Balls Head Bay, Waverton. the MV Freshwater and for the Manly-Circular Quay run and the a former Sydney Harbour ferry which is now a cruise boat in Melbourne.