Captain Cook first spotted the area now known as Bare Island in 1770, and referred to it in his journal as 'a small bare island'. The fort was built in the early 1880s to protect Sydney’s back door. It was in operation until 1908, after which time it became Australia's first war veterans' home.
http://www.sydney.com/destinations/sydney/sydney-east/la-perouse/attractions/bare-island-fort