723 Squadron was first established at NAS Nowra on 28 February 1945.  Equipped with Martlet, Corsair and Anson aircraft, the Squadron conducted target towing, radar tracking and navigation training exercises for other Squadrons disembarked from British Pacific Fleet Air Arm carriers.  723 Squadron decommissioned on 31 May 1946 when RANAS NOWRA was returned to the RAAF.  
The Squadron recommissioned in the RAN on 7 April 1952.  Squadron roles included Fleet requirements, communications, sea/air rescue, refresher flying and co-operation with the Australian Joint Anti-Submarine School.  On 11 March 1953 the Squadron received the RAN's first rotary wing aircraft in the form of three Bristol Sycamore helicopters for Search and Rescue and Fleet support duties.  During 1954, the Squadron received four Vampire jet trainers.  The Squadron was again decommissioned in October 1956.

The Squadron was reformed on 18 February 1957 with five Sycamore helicopters as the major aircraft type.  Major Squadron roles were search and rescue, helicopter pilot training, communications, target towing and Fleet support.  Australia's entry into the Vietnam conflict caused 723 to begin operational training for the Vietnam flight.  

Today the Squadron is comprised of three Bell 206B Kiowa, six AS350B Squirrel helicopters and two HS748 aircraft.  Over the years the Squadron has served the Nowra locals and the wider civil community with bushfire and flood relief assistance, searches and rescues of bushwalkers and fishermen.

Historical agency address
1945-   : Naval Air Station, HMAS Albatross [II] Nowra, NSW