The modern club was established on 10th July 1956, although records show that another club by the same name had been playing in the early 1900s, including winning Division II B of the Essex & Suffolk Border League in 1927-28. The new club joined Division Two of the Colchester and East Essex League, and by 1960 had reached the Premier Division. They won the Premier Division in 1967-68 and again in 1973-74. The following season saw them reach the final of the Essex Junior Cup, where they lost 1-0 to Takeley.
In 1975, Stanway joined Division One of the Essex & Suffolk Border League and, in 1978, were placed in the new Division Two. The 1978-79 season saw the club finish third and win promotion to Division One. They were later relegated to Division Two, which they won in 1981-82 and again in 1985-86 after another relegation. However, in 1986-87 the club won Division One and were promoted to the Premier Division. In 1990 and 1991 the club reached the final of the Essex Intermediate Cup, but lost both matches 3-1. In 1991-92, they were Premier Division runners-up and were promoted to Division One of the Eastern Counties League. In 2005-06 the club won Division One and were promoted to the Premier Division. They went on to win the League Cup in 2008-09, beating Leiston 4-2 on penalties in the final. They won the cup again in 2011-12 with a 2-1 win over Norwich United in the final.

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At the end of the 2017-18 season, Stanway were transferred to the Essex Senior League. However, after a single season in the Essex Senior League, they were moved back to the Eastern Counties League Premier Division.

The club was initially based at the King George V playing fields in Lexden (more commonly known as Clairmont Road) before moving to The Stanway School in 1961. In 1979 the club agreed a 99-year lease with the local council for a 4.6-acre (19,000 m2) plot of land. On 18th November 1982 the new clubhouse was opened, and named The Hawthorns.