Green’s Dictionary of Slang

1. (Aus.) a settler who arrived in Australia as a transported convict [such settlers had ‘legal reasons’ to make the trip].

1826		Colonial Times & Tasmanian Advertiser (Hobart, Tas.) 21 July 3/2: The article [...] declares itself to be the production of a ‘bona fide legitimate Settler, who is no vain speculatist, and who is of no very ambitious turn’.
1827		P. Cunningham New South Wales II 116: Next, we have the legitimates, or cross-breds, — namely, such as have legal reasons for visiting this colony; and the illegitimates, or such as are free from that stigma.
1945		Baker Aus. Lang. 41: A large number of synonyms for convict became current, among them [...] legitimate (i.e. a person with a legitimate or legal reason for coming to Australia).

2. a sovereign (money) [? as opposed to a forgery].

1823

‘Jon Bee’ Dict. of the Turf, the Ring, the Chase, etc.