On 1 May 1956, "Sydney" met "Melbourne" off Kangaroo Island during the latter's delivery voyage. The two carriers sailed together for the remainder of "Melbourne"s delivery voyage, visiting Melbourne and Jervis Bay before arriving in Sydney on 10 May. Three days later, the flagship role was transferred from "Sydney" to "Melbourne". After this, "Sydney" continued on a program of training cruises throughout Australian and New Zealand waters, and visited the Far East Strategic Reserve to participate in a South East Asia Treaty Organisation multi-fleet exercise during September and October 1956. Following an appraisal process by the RAN, during which "Sydney"'s potential usefulness as a commando carrier, aircraft transport, or troopship was considered, the ship was paid off into Special Reserve on 30 May 1958 as surplus to requirements. "Sydney" could be reactivated for use as a transport, but required at least four months notice.