The state government will not use the derelict nurses quarters at the former Stockton Centre to house homeless people, it has confirmed.
It follows Monday's announcement that part of the centre, which was closed in 2021, will be transformed to provide temporary accommodation for up to 25 people.
Properties to be upgraded as part of a $2 million program of works include five five-bedroom homes, one two-bedroom unit and a one one-bedroom unit.
Minister for Disability Inclusion Kate Washington ruled out using the two-storey nurses quarters for crisis accommodation after inspecting the building last year.
She said the quarters were in an "uninhabitable state"
The center's sewage systems have previously been flagged as not being up to standard.
A spokesman for Ms Washington said on Monday that the centre's "south-west corner near the entrance" would be used for homeless accommodation. Further detail was not provided.
The homes and services are expected to become operational at the former Stockton Centre in approximately eight months.
The site needs work to ensure the security and safety of the temporary residents, provide essential amenities and ensure the houses meet the standard appropriate for transitional housing needs.
"The NSW Government is committed to exploring every option to transform underutilised sites into fit for purpose housing. If we have mothballed properties sitting empty, we will investigate whether they can be upgraded and used to provide vital shelter," Minister for Housing and Homelessness Rose Jackson said on Sunday.
"Transforming these homes into a safe base for people who would otherwise be sleeping rough is the first step to helping people get back on their feet and into longer-term accommodation.
More than 55,000 people, including close to 2000 in Newcastle and Port Stephens, are on the social housing waitlist.
The Newcastle Herald reported in January that demand for homelessness services in the Hunter had soared by 59 per cent in eight years.
Homelessness NSW released the data, which showed the number of people seeking specialist homelessness services.
The data showed 5676 people across the Hunter used these services last financial year.
Newcastle recorded the highest rise in the region, with those affected increasing from 1015 in 2014/15 to 1819 in 2022/23 - a 79 per cent hike.
Lake Macquarie recorded a 71 per cent rise, with the number of affected people increasing from 772 to 1322 over that eight-year period.
Port Stephens recorded a 60 per cent rise, with the number of affected people increasing from 652 to 1040 over that period.
