Designs for a new mental health centre at Maitland Hospital have been released, prompting calls for the site to have adequate natural areas to foster healing.
Services will be moved to the Maitland site from Morisset Hospital, a huge parcel of lakefront land worth millions.
The centre, due to be completed by 2027, includes forensic mental health services.
The design aimed to support "a rehabilitation model of care".
NSW Minister for Mental Health Rose Jackson said the project would help forensic patients "safely progress through their recovery and rehabilitation".
Forensic mental health units are part of the justice system, enabling offenders to receive treatment after committing crimes due to mental illness.
The site will include inpatient units for low- and medium-security forensic patients, and a rehabilitation and recovery unit.
The units will have single bedrooms with ensuites, a shared kitchen, dining and living areas and indoor and outdoor therapy spaces.
The project includes additional parking spaces so staff, visitors and emergency services can access the centre quickly.
The government said the Maitland site's design was shaped by consultation with staff and "people with lived experience of mental ill health".
Wayne Barrett, who had stayed in mental health units, said natural settings were important for healing.
Mr Barrett, a former office manager for a state MP and minister, said the Morisset site had "a lot of outdoor space with gardens" - and the land could be sold for millions.
He said the government should make sure the Maitland site was not "boxes within boxes in the middle of a car park".
Maitland MP Jenny Aitchison said the Maitland site would have "therapeutic outdoor areas designed to foster recovery and wellbeing".
Dr Anand Swamy, executive director of Hunter New England Mental Health Services, said it had been "designed with rehabilitation at its core".
Dr Swamy said it would provide "a welcoming environment that promotes recovery, with walking paths and shared living areas".
He said this would create "a healing environment".
The future of the 1244-hectare lakeside Morisset Hospital site is expected to attract public interest.
A new Myuna Bay Sport and Recreation Centre is planned on seven hectares of the site, but it's unclear what will happen to the rest of the land.
A Lake Macquarie City Council heritage plan, adopted in 2021, said the site "combined an idyllic concept of natural beauty as a catalyst for mental healing".
This comprised a "19th century ideal" of using nature to heal and "the practice of isolating those considered abnormal".
"The large area of the general hospital for the insane is beautifully landscaped, with grounds sloping down to the waters of the lake on the east," it stated.
"The much smaller area of the hospital for the criminally insane is isolated in a cleared patch of bushland, and walled like a medieval city.
"There are almost 100 buildings within the hospital grounds. The bushland is an important habitat for [endangered] regent honeyeaters and swift parrots."
Any development proposal affecting the site's heritage or cultural values must submit a conservation management plan to council for "the entire Morisset Hospital grounds".