Lake Illawarra was loaded with zinc concentrate, for the Electrolytic Zinc Company (more recently known as Zinifex and OZ Minerals) refinery (now run by Nyrstar) at Risdon, about 3 nautical miles (5.6 km; 3.5 mi) up the River Derwent from the bridge.
Just before the impact, Captain Boleslaw Pelc realised as he passed Rosny Point that he was off course, and traveling too fast. He tried to correct the heading, but only managed to bring the bows too far to port (left) and was now heading for the western shore. He urgently counter-corrected, but could not make the opening. Realising he was headed for a collision, he ordered the engines full astern, but the torque from her propeller caused the ship to slide in a broadside movement. She smashed into the 18th and 19th pylons.
The collision brought down the two support pylons and a 127-metre (417 ft) section of steel and concrete. There was evening traffic on the bridge, and although no vehicles were on the section that fell, four cars drove off the gap, with five people killed. Two cars stopped on the edge, their occupants able to escape. The section of four-lane highway landed on the ship's deck, sinking her in 35 metres (115 ft) of water to the south of the bridge. Seven of the ship's crew lost their lives in the accident.
The ship and the debris pile were deemed unsafe to move; the ship's oil was pumped out, and the bow was removed at a later date. The wreck is deep enough not to be a navigational hazard, although movement caused by tides is considered enough of a threat to the bridge to be monitored closely by electronic sensors.
The subsequent Court of Marine Inquiry found that Lake Illawarra was capable of passing beneath the bridge's central navigation span, but the captain instead attempted to pass through one of the eastern spans, due to a combination of strong tidal currents and inattention. The Court found that Pelc had not handled Lake Illawarra in a proper and seamanlike manner, and suspended his master's certificate for six months. A pilot service was introduced in response to the court's findings.