HMAS "Nizam" was laid down by John Brown and Company, Limited, at Clydebank in Scotland on 27 July 1939. She was launched by the wife of Sir Holberry Mensforth, a director of John Brown, on 4 July 1940. The ship was commissioned on 19 December 1940; an error in a file at Navy Office caused some sources to incorrectly record the commissioning date as 8 January 1941. Although commissioned into the RAN, the destroyer was on loan from the Royal Navy. HMAS "Nizam" was named after Sir Osman Ali Khan, The Last Nizam of Hyderabad.