The office has its origin in the 18th-century colonial governors of New South Wales upon its settlement in 1788, and is the oldest continuous institution in Australia. The present incarnation of the position emerged with the Federation of Australia and the New South Wales Constitution Act 1902, which defined the viceregal office as the Governor acting by and with the Advice of the Executive Council of New South Wales. However, the post still ultimately represented the government of the United Kingdom until, after continually decreasing involvement by the British government, the passage in 1942 of the Statute of Westminster Adoption Act 1942 (see Statute of Westminster) and the Australia Act 1986, after which the governor became the direct, personal representative of the uniquely Australian sovereign.
The office of Governor is required by the New South Wales Constitution Act, 1902. The Australian monarch, on the advice and recommendation of the Premier of New South Wales, approves the appointment of Governor with a commission issued under the royal sign-manual and Public Seal of the State, who is from then until being sworn-in by the Premier and Chief Justice referred to as the Governor-designate.
Besides the administration of the oaths of office, there is no set formula for the swearing-in of a governor-designate. The constitution act stipulates that: "Before assuming office, a person appointed to be Governor shall take the Oath or Affirmation of Allegiance and the Oath or Affirmation of Office in the presence of the Chief Justice or another Judge of the Supreme Court." The sovereign will also hold an audience with the appointee and will at that time induct the governor-designate as a Companion of the Order of Australia (AC).
The incumbent will generally serve for at least five years, though this is only a developed convention, and the governor still technically acts at Her Majesty's pleasure (or the Royal Pleasure). The premier may therefore recommend to the Queen that the viceroy remain in her service for a longer period of time, sometimes upwards of more than seven years. A governor may also resign and three have died in office. In such a circumstance, or if the governor leaves the country for longer than one month, the Lieutenant Governor of New South Wales, concurrently held by the Chief Justice of New South Wales since 1872, serves as Administrator of the Government and exercises all powers of the governor. Furthermore, if the Lieutenant Governor becomes incapacitated while serving in the office of Governor or is also absent from the state, the next most senior judge of the Supreme Court is sworn in as the Administrator.
Between 1788 and 1957, all governors were born outside of New South Wales and were often members of the Peerage. Historian A.J.P. Taylor once noted that "going out and governing New South Wales became the British aristocracy's 'abiding consolation'". However, even though the implementation of the Australian Citizenship Act in 1948 established the concept of an independent Australian citizenship, the idea of Australian-born persons being appointed governor of New South Wales was much earlier. Coincidentally the first Australian-born Governor, Sir John Northcott on 1 August 1946, was also the first Australian-born Governor of any state. However, as Northcott was born in Victoria, it was not until Sir Eric Woodward's appointment by Queen Elizabeth II in 1957 that the position was filled by a New South Wales-born individual; this practice continued until 1996, when Queen Elizabeth II commissioned as her representative Gordon Samuels, a London-born immigrant to Australia.