(Transcript from World News Australia Radio)
The anniversary has drawn international support, with 17 countries sending ships to Australia to mark the event.
On the morning of October 4, 1913, thousands of people gathered in Sydney to watch seven Australian warships, led by the HMAS Australia, sail into the harbour.
For the new nation, it marked the first time the navy had been presented as a unified national force.
Then-prime minister Joseph Cook suggested that, "since Captain Cook's arrival, no more memorable event has happened than the advent of the Australian fleet."
In his words, the arrival of the HMAS Australia was to be welcomed not as an instrument of war, but as a harbinger of peace.
Now, 100 years later, thousands will again converge in Sydney to commemorate the moment and watch ships from 17 countries enter Sydney Harbour.
The president of the Victorian Chapter of the Naval Historical Society of Australia, Rex Williams, says it is significant not just for military-history enthusiasts, but for the whole country.
"It's a huge event. People love their navy, and little kids love the navy, because it's big and it's impressive, and I think the general public will be absolutely rapt out of their mind. It'll make them realise that they are an island nation and that they do need their navy."
Celebrations continue until 11 October.
They will feature a re-enactment of the historic arrival of the HMAS Australia, along with a fireworks display on Saturday and various ship displays.
The commemorations will feature ships from countries such as the United States, New Zealand, France, China and -- for the first time -- Nigeria.
An International Fleet Review spokesman, Commander Nick Hart, says that shows the importance of Australia's navy in international diplomacy.
"I think that it's a demonstration of the positive relationship that Australia has with many countries, both globally and in the region. And it's a demonstration of the support these nations have for the relationship with Australia."
Rex Williams, from the Naval Historical Society, says the role the navy has played in both the first and second world wars is frequently overlooked.
"There were 13 German ships in the Pacific, led by some pretty capable naval commanders, and the most important thing about us getting these warships coming into Sydney Harbour in 1913, one year before the First World War, was that the Germans just backed right off, because, when they saw the 12-inch guns of HMAS Australia, which was a battle cruiser, they knew that, if they came anywhere near that ship, they were gone."
But it has not all been smooth sailing a hundred years later.
Mr Williams says there have been a few mishaps leading up to the centenary celebrations.
"We've had a few disappointments. The Russians have pulled out. And, on the way, there was a collision between two Canadian ships just off Hawaii, and both of them have had to go home. They ran into each other. It happens! It's not been without drama, getting here."
An Indigenous tall ship will be among the vessels participating in the re-enactment of the HMAS Australia's arrival.
Graduates of the Defence Indigenous Development Program, which aims to recruit and promote Indigenous sailors within the navy, will sail the ship.
The navy's strategic adviser on Indigenous cultural affairs, Ray Rosendale, is one of the Indigenous members of the navy who will be aboard for the commemoration.
He says the navy has a strong pull for Indigenous Australians.
"It's an identity thing. It gives us a sense of family that we're used to. We grow up in a lot of tight-knit family groups, large extended family groups. And the navy is very much like that. It is a large extended family. You've always got someone to be with, someone to help you, or someone you can help. It's also the adventure of it. The warrior spirit for a young male is something we take very seriously, and you get to represent that not only as an Indigenous man, but as a sailor. For our young women, it gets them out of the communities, out of traditional views of what women do in a community, and it lets them show the smart, intelligent young women that they really are."
Despite barely more than one-and-a-half per cent of the navy identifying as Indigenous, Mr Rosendale is optimistic the numbers will continue to increase.
"We're looking to recruit much more in the next few years. We've actually increased our recruiting rate over the last couple of years. We are working very hard to get up to the national average of around 2.7 per cent, and better."
He says Indigenous Australians have played a significant role in naval history, making their presence at this weekend's centenary celebrations even more significant.
"We have been in the military from a very early stage. The first recorded sailor, in the colonial Victorian navy, was Thomas Bungalene. He was in the Royal Victorian Colonial Navy in the 1860s. After that, we've had people serving in all the services right through every conflict up till today."
