HMAS Adelaide, the ship that came to the rescue of stranded yachtsmen and terrified asylum seekers, now begins its final chapter underwater.

The decommissioned frigate was on Friday handed over by the commonwealth to the NSW government and will be sunk off Terrigal on the NSW Central Coast later in the year to create an artificial reef and dive wreck.

NSW Premier Nathan Rees said instead of being scrapped or dumped, the ex-HMAS Adelaide would be used by generations of divers.

“Coral will grow on the metal you see before you, fish will swim through the corridors that once rang with the sound of action stations,” Mr Rees said.

“And divers will find a place of contemplation and beauty as nature slowly reclaims her broken frame.”

The federal government will contribute up to $5.8 million to make sure the ship is environmentally-sound by stripping it and removing the fuel tanks.

Defence Minister John Faulkner said the scuttling of the ship would have long-term benefits.

“I think this is a great project, I’m very confident we’ll see HMAS Adelaide become a great national, and I suspect international, attraction for recreational divers ..,” he said.

HMAS Adelaide served the Royal Australian Navy for 27 years, participating in 30 overseas deployments, including the 1991 Gulf War and peace-keeping operations in East Timor in 1999.

The crew of the HMAS Adelaide rescued solo yachtsmen Tony Bullimore and Thierry Dubois, whose yachts both capsized in the Southern Ocean during a round-the-world race in 1997.

In 2001, the crew of HMAS Adelaide intercepted a boat carrying asylum seekers near Christmas Island, rescuing all on board when it sank.

Photographs of the rescue operation became the centre of the children overboard affair.

HMAS Adelaide was decommissioned in January last year at Garden Island in Western Australia.

Sue Dengate, who rallied to get the ship scuttled near Terrigal, said Central Coast dive clubs had been working for 10 years to secure an ex-naval vessel.

Ms Dengate, whose son served on the HMAS Adelaide, said divers would continue to appreciate its history.

“When a diver goes on this wreck when it’s sunk, they will want to know more about its history and that … gets people involved more in the services and the contribution they make.”

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MARK Salter’s plan for an artificial reef for scuba divers on the Gold Coast has received a welcome boost after Defence Minister Joel Fitz-gibbon indicated a warship suitable for the job could be decommissioned from the Royal Australian Navy by 2012.

Mr Salter, aka ‘Sharky’, has been campaigning for years for an artificial reef as a tourist attraction. An email from Mr Fitzgibbon says under the Defence Capability Plan 2006-2016, the heavy landing ship HMAS Tobruk might be replaced by 2012. Mr Salter is now planning a campaign to snare the 126m vessel. “It’s a start,” said the owner of the Gold Coast-based Queensland Scuba Diving Company. “I’m getting T-shirts printed, sending letters and starting to get the word out. “Premier Anna Bligh and Mayor Ron Clarke have to get behind it.

“We have three years to get it and we need to start now. This is a boat the Gold Coast should want. We need to put our hand up now.” HMAS Tobruk, which entered service in 1981, weighs more than 5000 tonnes and was the navy’s first purpose-built amphibious vessel.

As reported in The Gold Coast Bulletin last year, Mr Salter has offered $500,000 out of his one-year-old son Harrison’s trust fund to get the project moving. “I’ll still put it up but conditions would apply,” he said. Mr Salter said the wreck would attract so many divers he would recoup the money quickly. Wreck diving on artificial reefs is a growing industry with the United States, Canada and Thailand all quick to seize the growing tourist dive dollar.

More than 300 reefs have been created in the US alone and Canada has sunk six ships and a Boeing 737 around British Columbia in recent years. The world’s largest artificial reef, created from the former USS Oriskany just off the Florida coast, is estimated to bring in $200,000 a month to the local economy while British Columbia recoups about $15 million a year in its dive-related businesses.

Thailand is preparing to sink a number of decommissioned military planes off Phuket to create the country’s largest artificial reef and Mr Salter believes the Gold Coast should explore the option.”We shouldn’t just stop at a ship,” he said. “We could put transporter planes and other things down there. Surfers Paradise has the best beaches but we don’t have a dive site.”