To form the yard, reclamation works were undertaken and the harbour was dredged to take the largest warships afloat in 1890. Stone was quarried and brought to the south of Sandy Bay and transported via tunnels to the yard that emerge at Ragged Staff. The principal building in the yard, the Tower, is now the office of the Commander of the British Forces, Gibraltar. It is a grand stone building with balconies and an elaborate tower. The main workshops and stores are stone-face with the walls articulated by rows of large Tuscan pillars.

The Yard was laid out from 1893 to 1907.

The Three Docks are:

PRINCE AND PRINCESS OF WALES DOCK (1) also known as Prince of Wales dock 1906.

QUEEN ALEXANDRA DOCK (2) Queen Alexandra named the dock after herself when she visited in 1905 on the Royal Yacht HMY VICTORIA AND ALBERT.

KING EDWARD VII DOCK (3) named by the King in 1903. This was the first visit to Gibraltar ever by a British Sovereign and the first ship to dock was the battleship HMS KING EDWARD VII.

Prior to becoming a Commercial Ship Repair Yard at the end of 1984, the HM Dockyard undertook the following works:

• ROTHSAY CLASS FRIGATES for docking/berthing for essential/operational defects – four to eight day refits.
• GENERAL PURPOSE LEANDER CLASS FRIGATES, six months – normal refits.
• COASTER MINE SWEEPERS/HUNTER (TON CLASS), nine months – long refits.
• ROYAL FLEET AUXILIARY routine/maintenance/essential – approximately eight weeks refits.
• CONVENTIONAL AND NUCLEAR SUBMARINE operational and essential refits with special blocks cradles for docking.
• AIR CRAFT CARRIERS operational/essential refits – four to five days including dry docking.
• Merchant and commercial vessels including ESSO tankers for emergency docking or other essential refits or repairs