The Observation Post, Sandy Creek at the Casuarina Coastal Reserve was built between 1939-1941 during the build-up of defence installations in Darwin. It was one of a set of structures constructed as part of an overall coastal defence strategy in anticipation by allied strategists of a sea and land based invasion. This particular post was constructed on the beach to allow a clear view of the sea along the length of the beach in both directions.

This post is significant for being part of a national and regional defence strategy. After the bombing of Darwin in 1942 the strategic position of these installations and the effectiveness of their intended purpose was severely questioned. They are a reminder of the serious underestimation made by the Allied Forces of the capabilities and strategy of the enemy. Troops were withdrawn from the area in March 1942 but regular patrols were maintained. A detachment of the Northern Australian Observer Unit occupied the area from Lee Point to Buffalo Creek from mid-1942.