She was converted into a screw ship in 1860, being cut down to a two-decker and fitted with an engine of 2,102 indicated horsepower (1,567kW) for a speed of 10.5 knots (19.4km/h; 12.1mph).
In 1865, Nelson was given to the colony of Victoria as a training ship, and she was finally outfitted and rigged for £42,000 and sailed for Australia in October 1867. Travelling via the Cape of Good Hope, she arrived in February 1868. She was the first ship to dock in the newly constructed Alfred Graving Dock.
Her armament in 1874 was listed as two 7-inch RML, twenty 64-lb guns, twenty 32-lb guns and six 12-lb howitzers.
During 1879-82, Nelson was further cut down to a single deck and her rig reduced to the main mast only, the ship being reclassified as a frigate. Her old armament was partly replaced by modern breech-loaders.
She was laid up at Willamstown in 1891, her boilers being removed in 1893.
On 28 April 1898 she was put up for auction and sold to Bernard Einerson of Sydney for £2,400
In 1900. Nelson was cut down yet again to create a coal lighter that kept the name Nelson, the upper timbers being used to build a drogher named Oceanic. (Originally, a timber drogher was a disposable ship, also called a raft ship, and was a barely seaworthy vessel assembled from large timbers lashed or pegged together for the purpose of making just a single voyage from North America to England, where the vessel was subsequently dismantled and its timbers sold piecemeal to British shipbuilders.)
In 1908 "Nelson" was sold to the Union Steamship Co. of New Zealand, and in July was towed from Sydney to Beauty Point on the Tamar River, Tasmania, for use as a coal storage hulk. She later foundered there with 1,400 tons of coal on board and remained submerged for forty days until finally refloated.
In January 1915 she was towed to Hobart for further service as a coal hulk, until sold in August 1920 to Mr. H Gray for £500 and towed an up river to Shag Bay for gradual breaking up. This work continued into the 1930's, although some of her timbers still survive today.
The ship's figurehead was preserved by the NSW Naval Brigade, then the Royal Australian Navy, before it was presented to the Australian National Maritime Museum for display.