Spain, at that time a world power with colonies across the Americas and the Philippines, feared that the British colony in Australia would be a threat to Spanish interests along the Pacific.
Spanish naval documents found by Chris Maxworthy, of the Australian Association for Maritime History, reveal the Spanish scheme, thought up by Carlos IV.
"The plan was to attack Sydney from the Spanish colonies in South America with a fleet of 100 medium-sized boats armed with cannons and 'hot shot' (a cannon that involved firing heated shots that could set fire to ships or buildings)", he told The Australian Financial Review.
Historians, however, say that if such an invasion had ever happened, Britain would quickly have retaken the colony, due to its stronger military and vast commercial interests in the area.
Despite serious concerns over the threat the British colony posed to its Pacific interests, Spain ultimately ditched the invasion plan.