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The Yarra River was very important to Aboriginal people, and its name is thought to derive from Aboriginal words meaning "ever flowing". In 1803, Charles Grimes, Acting Surveyor General of New South Wales, led the first party of Europeans up the Yarra River.

The river was instrumental in the establishment of Melbourne beside its banks in 1835. It provided shelter for the first ships and drinking water for the first inhabitants; it drained the neighbouring land; it was a ready made sewer; and it gave the early industries the large volumes of water necessary in their processes. After a steady deterioration in water quality during the 19th century, measures were undertaken more recently to clean up the river.

Over the years, the mouth of the river has been completely transformed by realignment, widening and deepening in order to create a large modern port.

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