Hunter had accompanied the first Governor of New South Wales on the Sirius, when a British colony was founded there in 1788, and was commissioned by the Crown to assume the duties of Lieutenant-Governor in case of Phillip's death. When the office fell vacant in 1793, Hunter applied for appointment. He secured the cordial support of Howe, and Sir Roger Curtis of the Queen Charlotte exerted his influence by recommending him as one whose selection "would be a blessing to the colony" on account of his incorruptible integrity, unceasing zeal, thorough knowledge of the country, and steady judgment. He was appointed Governor in February, 1794, and in March of the same year H.M.S. Reliance, with the tender Supply, were commissioned to convey him to Sydney.

Henry Waterhouse was chosen to command the Reliance, under Hunter, at that officer's request. He expressed to the Secretary of State a wish that the appointment might be conferred upon an officer to whom it might be a step in advancement, rather than upon one who had already attained the rank of commander; and he recommended Waterhouse as one who, though a young man and not an old officer, was "the only remaining lieutenant of the Sirius, formerly under my command; and having had the principal part of his nautical education from me, I can with confidence say that he is well qualified for the charge."

It is probable that Flinders heard of the expedition from his Bellerophon shipmate, Waterhouse, who by the end of July was under orders to sail as second captain of the Reliance. Certainly the opportunity of making another voyage to Australian waters, wherein, as he knew, so much work lay awaiting an officer keen for discovery, coincided with his own inclinations. He wrote that he was led by his passion for exploring new countries to embrace the opportunity of going out upon a station which of all others presented the most ample field for his favourite pursuit.

The sailing was delayed for six months, and in the interval young Flinders was able to visit his home in Lincolnshire. Whatever opposition there may have been to his choice of the sea as a profession before 1790, we may be certain that the Donington surgeon was not a little proud of his eldest son when he returned after a wonderful voyage to the isles of the Pacific and the Caribbean Sea, and after participation in the recent great naval fight which had thrilled the heart of England with exultation and pride. The boy who had left his father's house four years before as an anxious aspirant for the King's uniform now returned a bronzed seaman on the verge of manhood. His intelligence and zeal as a junior officer had won him the esteem and confidence of distinguished commanders. He had looked upon the strangeness and beauty of the world in its most remote and least-known quarters, had witnessed fights with savages, threaded unmapped straits, and had, to crown his youthful achievements, striven amidst the wrack and thunder of grim-visaged war. We may picture his welcome: the strong grasp of his father's hand, the crowding enthusiasm of his brother and sisters fondly glorying in their hero's prowess. The warnings of uncle John were all forgotten now. When the midshipman's younger brother, Samuel Ward Flinders, desired to go to sea with him, he was not restrained, and, in fact, accompanied him as a volunteer on the Reliance when at length she sailed.

Hunter took not merely an official but a deep and discerning interest in the colonisation of Australia. He foresaw its immense possibilities, encouraged its exploration, promoted the breeding of stock and the cultivation of crops, and had a wise concern for such strategic advantages as would tend to secure it for British occupation. He perceived the great importance of the Cape of Good Hope from the point of view of Australian security; and a letter which he wrote to an official of the Admiralty while awaiting sailing orders for the Reliance (January 25, 1795), is perhaps the first instance of official recognition of Australia's vital interest in the ownership of that post. There was cause for concern. The raw and ill-disciplined levies of the French, having at the outbreak of the Revolutionary wars most unexpectedly turned back the invading armies of Austria and Prussia, and having, after campaigns full of dramatic changes, shaken off the peril of the crushing of the fatherland by a huge European combination, were now waging an offensive war in Holland. Pichegru, the French commander, though not a soldier by training, secured astonishing successes, and, in the thick of a winter of exceptional severity, led his ragged and ill-fed army on to victory after victory, until the greater part of Holland lay conquered within his grip. In January he entered Amsterdam. There was a strong element of Republican feeling among the Dutch, and an alliance with France was demanded.

When this condition of things was reported in England, Hunter was alarmed for the safety of the colony which he was about to govern. The Cape of Good Hope was a Dutch possession. Holland was now under the domination of France. Might not events bring about the establishment of French power at the Cape? "I cannot help feeling much concerned at the rapid progress of the French in Holland," he wrote, "and I own shall not be surprised if in consequence of their success in that country they make a sudden dash at the Cape of Good Hope, if we do not anticipate them in such an attempt. They are so very active a people that it will be done before we know anything of it, and I think it a post of too much importance to be neglected by them. I hope earnestly, therefore, that it will be prevented by our sending a squadron and some troops as early as possible. If the Republicans once get a footing there, we shall probably find it difficult to dislodge them. Such a circumstance would be a sad stroke for our young colony."

The course which Hunter then advised was that which the British Government followed, though more because the Cape was the "half way house" to India, than for the protection of Australian interests. An expedition was despatched later in the year to protect the Cape against French occupation, and in September the colony, by order of the Stadtholder of Holland, accepted British protection.

The Reliance and the Supply left Plymouth on February 15th, 1795, amongst a very large company of merchantmen and ships of the navy convoyed by the Channel Fleet under Lord Howe, which guarded them till they were beyond the range of possible French attacks and then sailed back to port.

From Teneriffe, which Hunter reached on March 6th, he wrote a despatch to the Government stating his intention to sail, not to the Cape of Good Hope, but to Rio de Janeiro in Brazil, and thence to New South Wales. His avoidance of the more direct route was due to the causes explained above. "In the present uncertain state of things between the French and Dutch," he had written before sailing, "it will be dangerous for me to attempt touching at the Cape on my way out;" and writing from Rio de Janeiro in May he explained that he did not "conceive it safe from the uncertain state of the Dutch settlements in India to take the Cape of Good Hope in my way to Port Jackson, lest the French, following up their late successes in Holland, should have been active enough to make an early attack on that very important post." In a despatch to the Duke of Portland he commented strongly on the same circumstance, expressing the opinion that "if the French should be able to possess themselves of that settlement it will be rather unfortunate for our distant colony."