Climate change induced increases in storm frequency and intensity are causing increased incidence of extreme flooding, resulting in negative impacts on nearshore marine species and habitats. In NSW severe flooding in March 2021 impacted habitats across more than 450 km of coastline. These floods caused the loss of ~50% of the kelp Ecklonia radiata within the Port Stephens embayment, with losses approaching 100% on shallow reefs. Experiments verified that reducing salinity, to levels comparable to those occurring during the floods, caused severe declines in adult kelp health but had less effect on gametophytes. Subsequent field surveys showed that recovery of adult kelp in affected areas occurred seven months after the floods, with recovery likely facilitated by survival of the more resilient kelp gametophytes. Overall, future climate-induced increases in flooding are likely to negatively impact kelp and other nearshore habitats in Australia, with recovery determined by the scale of impacts and the resilience and dispersal of propagules.