Woodward was promoted to Rear Admiral and in 1981 appointed Flag Officer First Flotilla. In 1982 he commanded the South Atlantic Task Groups in the Falklands War under the Commander-in-Chief Lord Fieldhouse. For his efforts during the war Woodward was knighted.
In 1983 Woodward was appointed Flag Officer Submarines and NATO Commander Submarines Eastern Atlantic. In 1984 he was promoted to Vice Admiral, and in 1985 he was a Deputy Chief of Defence Staff. Before retirement in 1989 he also served as Commander of the Naval Home Command and Flag Aide-de-Camp to the Queen.