Hannay has long been interested in writing. When she joined the Brownies as a child, she earned her first proficiency badge in writing. Throughout her school years, Hannay continued to write, especially short stories and poetry, but never attempted to publish any of her work. As an adult, she taught English on the high school level. One year she was assigned to teach English for Year 11 students, with a required focus on popular fiction. She intended to use romance novels as an example of popular fiction that focuses on stereotypical characters and plots. After reading several Mills and Boon romances, however, she "recognised ... that today's romances have the same ingredients I enjoyed in the classic girls book I read when I was young. ... all these stories had spirited heroines and gorgeous guys who were perfect for them". She enjoyed the short length of the novels and the fact that they focused on women and left hope of a happy ending.
For over four years, Hannay wrote contemporary romance novels and attempted to find a publisher. She was rejected four times before her work was accepted by the Harlequin Romance line of "sweet" category romances. The first book she sold was set in the Australian outback, and many of her others have also used that setting. Her novels have been translated into 20 languages, including Arabic, Russian, and Japanese, and are especially popular in the United States, France, and Italy.
In 2007, Hannay won the Romance Writers of America RITA Award for Best Traditional Romance for her novel Claiming His Family. She has also been twice nominated for a Romantic Times Reviewers' Choice Award, winning in 2001 for Outback with the Boss.