The Sunshine Coast University College was founded in 1994, with the first students starting at the Sippy Downs campus in 1996. Full university status was granted to the new institution in 1998 and it became the University of the Sunshine Coast. On opening, USC became the first greenfield university in Australia since 1971. The University was founded to serve the needs of the wider Sunshine Coast community, one of Australia's fastest growing regions. Representatives of the Sunshine Coast region had long lobbied for a university to be established in the area, recognising a need to provide local residents access to tertiary education. It was also recognised that the establishment of a university would provide unprecedented economic benefits to the region.

The first discussions for a university in the region began in 1973, but it wasn't until 1989 that the Commonwealth government approved the establishment of a university. In 1992 A$9.5 million was allocated to develop the Sunshine Coast campus. A 100-hectare site at Sippy Downs was selected for the new university. A former cane farm, the site was chosen because it lay at the geographical heart of the Sunshine Coast and its shires, and was accessible from the Bruce Highway and other major transport routes. On 1 July 1994 Queensland Parliament passed The Sunshine Coast University College Act, 1994, creating Queensland's seventh public university. The first soil was turned on site on 4 September 1994 with construction commencing soon after. Stage I was completed well before the University's first day of business - 26 February 1996, when 524 new students were welcomed onto campus.