Volunteers and marine mammal specialists on the south coast released a dolphin into the wild on Thursday, more than six months after it entered St Georges Basin.
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The delicate operation went according to plan, with the dolphin relocated from Sussex Inlet to water off Bendalong beach.
The female dolphin was soon seen interacting with wild dolphin pods and feeding nearby.
NSW Parks and Wildlife marine fauna co-ordinator Geoff Ross said representatives of five organisations including Sea World and the RSPCA were joined by local vet Justin Clark for the relocation.
"We have been monitoring the animal for a number of months and hoped it would return to open waters and join a pod in the wild," Mr Ross said.
"We also held concerns the dolphin would fall victim to a boat strike or entanglement because it frequently approached vessels and had minor scarring from a recent encounter with a propeller.''
Mr Ross said intervention was a last resort for the dolphin, which has a distinctive triangular nick missing from the upper half of its dorsal fin. "For many people, today will be a sad day farewelling this dolphin, but returning her to the wild is best for her welfare,'' he said.
The dolphin will be monitored by volunteers in coming days.
Members of the public are invited to help monitor the success of the relocation by reporting the time and location of sightings at dolphinresearchaustralia.com.