Macroalgae are increasingly prevalent on the inshore reefs of the central Great Barrier Reef due to increasing stress and disturbance. High macroalgae abundance can inhibit coral growth and recruitment, leading to declining coral cover and ecosystem function. Experimental studies show long-term macroalgae removal may restore coral cover at macroalgae-dominated sites. However, coral cover is a weak predictor of ecosystem function, a key objective of restoration projects. This study analyses functional diversity of coral communities subject to long-term macroalgae removal to predict benefits towards ecosystem functions and services. Functional diversity was calculated through the variation of functional traits and compared across plots where macroalgae have been regularly removed (‘removal’) and plots where no macroalgae were removed (‘control’). Functional diversity was 81.8% higher in removal plots, underpinned by greater coral growth rates, branching space, colony height, and morphological variation relative to controls. Removal plots also contained functionally unique taxonomic groups at greater abundances relative to controls. Changes in functional roles in the macroalgal removal plots predict increased carbonate production, structural complexity and habitat provisioning, with additional localised recovery of ecosystem functions and services.