Wollongong Hospital's expansion will come at the expense of two fig trees considered to be in bad health themselves.
Preliminary earthworks have begun to clear the way for construction of the hospital's $86 million Elective Surgical Services Centre.
An Illawarra Shoalhaven Local Health District spokeswoman said the trees were being removed following extensive consultation regarding their environmental and heritage significance, as part of the development application approved earlier this year.
"As part of the process, an independent arborist found the fig trees were not in optimal health as a result of the presence of a decay fungus," the spokeswoman said.
"This meant their lifespan was limited and transplantation was not a feasible option.
"A number of rock orchids growing inside the figs have been successfully salvaged."
The project team is now seeking the advice of horticultural experts before determining whether the orchids could be incorporated as part of the upgraded hospital campus.
Construction work on the new building is due to start before the end of the year and should be completed by 2015.
The expansion will house a new elective surgery and ambulatory care unit featuring dozens of new theatres, beds and treatment bays, as well as an expansion of the emergency department.
Earlier fears over the partial demolition of the state heritage-listed Elouera House for the hospital's expansion have been eased, with the government agreeing the plan would not have a significant heritage impact.
A 1941 extension jutting from the western side of the 1937 art deco and functionalist-style building fronting Loftus Street will be razed.