Independent Lake Macquarie MP Greg Piper fears the opportunity to build a new Lake Macquarie sport and recreation centre could be lost because of the failure to prepare a master plan for the heritage-listed Morisset Hospital site.

Minister for Sport Steve Kamper announced in December last year that seven hectares of the hospital's land would be transferred to the Office of Sport for the purpose of building a new $40 million sports centre.

While the hospital is not due to close until 2027, Mr Kamper said the government wanted to act promptly to progress the planning and construction for the new facility, which will replace the former Myuna Bay centre.

Mr Piper recently told state parliament that although the government had advised of its intention to vacate the hospital site, there were no plans for its future.

"As far as I can see, it just plans to turn the lights off and leave," he said.

"If NSW Health decamps without planning for the resulting physical, social and economic impacts, the site will be subject to degradation, vandalism and theft rather than redevelopment. Instead of leveraging the sport and recreation amenity of the Morisset sports facility to attract investment, we will see vegetation overgrow the site and infrastructure fall into disrepair."

Mr Piper said he was concerned that, without a master plan, responsibility for upgrading the enabling infrastructure needed for the new sports facility would fall upon the Office of Sport.

"Make no mistake: if the funds committed to this project are eaten up by enabling works, the sports facility will not get built," he said.

"The 2025-26 NSW budget has not allocated money to the master plan, let alone the enabling works. To that I say that the government always knew enabling infrastructure would be needed for the sports facility, no matter the location."

Acting Hunter New England Local Health District executive director, infrastructure, planning and sustainability Anna Styles-Tape said planning was underway to relocate services at Morisset Hospital to the new Maitland mental health rehabilitation facility, once the project is complete in 2027.

The new facility at Maitland is funded as part of the government's $700 million statewide mental health infrastructure program.

"Property Development NSW will manage the transfer of the agreed portion of the Morisset Hospital site to the Office of Sport on behalf of Hunter New England Local Health District. A Project Coordination Group has been established to determine and agree on the timing of the transfer and relocation strategy, noting that patient services will continue on the Morriset site until 2027," Ms Styles-Tape said.

The government reserved over 1200 hectares of land in 1900 to build Morisset Hospital, which officially opened in 1909.

Mr Piper told parliament that the government should seize the opportunity to plan for the site's future in a way that recognised its natural and cultural heritage values.

In particular, he called on the government to complete an up-to-date heritage management plan so that the 14 heritage items of state significance in the local environmental plan can be protected and restored.

"We cannot let the opportunity pass by because of a failure to properly plan for it. To do so would shortchange the people of Lake Macquarie," he said.

"NSW Health is well aware of the issues that will arise if it decamps from Morisset without preparing a master plan. It is mind-boggling that it could think of doing so when it knows that this would lead to degradation of the site and its valuable heritage buildings, undermine the viability of the Morisset Sports Facility and limit the future success of the local community.