In December 1820 Mermaid grounded and, although able to free herself and limp back to Sydney, a hull survey led to her relegation to survey work. In 1823, Mermaid was sold to the colonial government of Australia, which used the ship for various errand runs. While aboard Mermaid in 1823, explorer and surveyor John Oxley discovered the Brisbane River, though he was not the first white man to locate the river; that distinction goes to three lost lumberjacks who were shipwrecked on Moreton Island during a storm. One of the three led Oxley to the river in a small boat, and Oxley later rescued the remaining two men from Moreton Bay.
In September 1825, Mermaid returned to the Brisbane River carrying explorer Edmund Lockyer to chart the upper reaches of the river, and in August 1826 the ship carried a botanist (and ex-convict) on a seed collecting expedition from Port Essington on Melville Island to Timor.
During a voyage from Sydney to Port Raffles at the northern tip of Australia's Northern Territory, Mermaid struck an uncharted reef off the Queensland coast on 13 June 1829 and eventually sank, though with no loss of life. In 2009, an underwater archaeology team led by the Australian National Maritime Museum located the wreck of the Mermaid.
Photo taken 26 November 2016, Museum of Brisbane, Brisbane, Australia