The two dollar coin denomination (written as $2) was introduced on 20 June 1988, when it replaced the banknote of the same value. The reverse design by Horst Hahne features a representation of the head and shoulders of a traditional Australian Aboriginal elder (hence the popular name for the coin type, the Aboriginal Elder), a representation of the Southern Cross and a representation of Australian flora. It was inspired by a drawing by Mr Ainslie Roberts depicting aboriginal man Gwoya Jungarai, hence the coin being listed as "Gwoya Jungarai" type in some recent catalogues.

Unlike later issues, the 1988 and 1989 dated coins carry the designer's initials HH in the lower left field.

Coins issued in 1988 have now been in circulation for 33 years.

Obverse
Crowned bust of Queen Elizabeth II wearing a pearl necklace, facing right (effigy known as the "Third Portrait"). Incuse in tiny letters on the neck truncation, the designer's initials RDM (for Raphael David Maklouf). Around, the monarch's legend and the date: ELIZABETH II AUSTRALIA 1988.

Reverse

The reverse design includes a representation of the head and shoulders of a traditional Australian Aboriginal (half-length figure of Aboriginal male, bare-chested, facing three-quarters right), a representation of the Southern Cross and a representation of Australian flora. To the right, in two lines, the value and denomination 2 DOLLARS. The designer's initials HH (for Horst Hahne) are in the lower left field.