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By the 1870s, the export of wool by river steamers from the Hay district to Victoria was becoming a concern to the government in Sydney. Also, in 1870 the Deniliquin-Moama Rail Company extended the Victorian gauge line to Deniliquin. In an attempt to counter this loss of trade to Victoria, the NSW Government decided to extend the railway system to Hay from Narrandera and offer attractive freight rates.

In 1880, tenders were called to construct the railway line and erect the Hay Railway Station. In 1882, the building was completed and the railway line was opened with great ceremony, on July 4.

The Railway Station is built of bonded brick with a corrugated iron roof featuring cast iron ridge decoration. The central section of the building is two stories. The verandah columns on the platform are of cast iron. Waiting rooms, cloakrooms and rest rooms were incorporated into the main building.

The Station Master's Residence was built in 1882 and is a single story building with a verandah and timber posts.

The Railway Station celebrated its centenary in 1982 and the last passenger train ran in 1983 after 101years of service. The goods service was closed in November the following year.

The Hay Railway Station is currently leased from State Rail by the Hay Shire Council. The station is then subleased 2HAYFM, the local community radio station.

The Railway Station was restored in 1992 to its original heritage colours, and in 2003-2004, State Rail renovated the exterior roofing and paving of the platform.

The Hay Railway Station is also home to the POW & Internment Camp Interpretive Centre – Dunera Museum. Visitors are welcome to inspect the Hay Railway Station and the area that has been landscaped around the building.