Shea's Creek, 1886: View of Shea's Creek before it was dredged to become the Alexandra Canal Image:Macleay Museum
Alexandra Canal was once a salt marsh known as Shea's Creek. Excavation began in 1887 to transform the marshland into a canal capable of carrying barges to transport goods from the nearby brickworks, woolen mills, tanneries and foundries.

During the excavation of Shea's Creek in 1896, the remains of a dugong were found in the estuarine clay. Examination by the then curator of the Australian Museum, Robert Etheridge, revealed the animal had been butchered by a blunt-edged cutting or chopping instrument. Two stone hatchet heads were found nearby.
Sketch of a dugong
The artifacts provide evidence of the Indigenous Australians who lived in the area prior to European settlement.

Construction of Alexandra Canal provided employment for workers during the depression of the 1890s. The original plan was for the canal to continue all the way to Sydney Harbour, but this did not eventuate, and construction of the canal ceased in 1900.
Dugong discovery, 1896: During excavation of the canal in 1896, the skeletal remains of a dugong were found. The curator of the Australian Museum, Robert Etheridge, can be seen wearing a top hat (centre), inspecting the dugong. Image: Australian Museum
During World War II, 250 wool sheds were constructed along the eastern side of the canal, built as temporary storage for the large amounts of wool stockpiled during the war. Some of these sheds still exist today.

In the 19th and 20th centuries, the canal became highly polluted by runoff from nearby industries, with the canal's sediment contaminated with heavy metals. In 1998, Sydney Water launched a $4 million plan to clean and restore the condition of the canal's water. Five tributaries flow into the canal.

Alexandra Canal was named after Princess Alexandra, who married Edward, Prince of Wales (later King Edward VII) in 1863. The suburb of Alexandria is also named after Princess Alexandra.