The hospital's oldest ward, B7, was decommissioned in 2015 when the new wards opened in the hospital's Illawarra Elective Surgical Services centre.

There's long been calls for it to be reopened; with Wollongong MP Paul Scully in 2017 claiming a ward should not lie empty while patients faced long waits for beds.

Earlier this year, the Illawarra Shoalhaven Local Health District (ISLHD) requested funds from the NSW government to refurbish the ward, and make 35 additional beds available.

However health department officials told NSW Parliament on Thursday that the $1 million required for the ward's upgrade would not be made available.

During a Budget estimates hearing on Thursday Nigel Lyons from the NSW Ministry of Health confirmed that while $2.2 million had been found for the hospital's maternity ward upgrade, there were no funds for B7.

"There was a submission made for two capital investments from Illawarra Shoalhaven," Mr Lyons said.

"One was for some additional funds to upgrade the maternity unit to enable some additional contemporary birthing infrastructure to be built and commissioned.

"We were able to find some funding to enable the maternity upgrade to occur ... but we were not able to find the additional funds to enable the refurbishment of the ward."

Mr Scully said he was outraged that both projects could not be funded.

"It is simply extraordinary that the Berejiklian government could not find $1 million to put 35 extra beds online to help ease some of the substantial pressure Wollongong Hospital has been under after years of chronic underfunding," he said.

"The request for additional funding from the ISLHD was extremely modest given the real funding increase which is necessary at Wollongong Hospital.

"Yet the government just couldn't bring itself to loosen the purse strings so it could fund opening up 35 extra hospital beds as well as upgrade the maternity unit."

The latest Bureau of Health Information quarterly report revealed the hospital is under pressure, with long waiting times in the emergency department and for elective surgery.

Labor's health spokesman, Keira MP Ryan Park, added: "What's the point of ring-fencing a large budget surplus if the government can't see the potential of opening 35 extra beds for Wollongong Hospital, which is bulging at the seams and struggling to meet increasing patient demand."