Following 20 years of community and political representation the station was officially opened on 21 July 1886. It was designed by John Whitton the Engineer in Chief, NSW Railways. In 1903 the branch line was extended to Tumut, following the completion of the railway bridge across the Murrumbidgee River flood plain.
The precinct environment is probably unique in railway terms in that it is sited on the side of a hill formation above a flood plain and the rail track access and the goods yard have been built by rock excavation into the hillside. This has resulted in a somewhat restricted site compared to the normal railway yard, particularly in view of the original intention for this station to be the terminus for the line.
For 98 years it was the hub of Gundagai's existence carrying freight, passengers and mail to and from the cities of Sydney and Melbourne.
Following damaging floods in 1984 the branch line was closed and in 1989 the State Rail Authroity abandoned the building. In 1994 Gundagai Historic Bridges Inc. was granted a 25 year lease of the disused and vandalized station and precincts. (Butcher 1998)