Berrima Gaol is set to be transformed into an entertainment precinct and hotel.
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Minister for Planning and Minister for Homes Anthony Roberts said the sale of the former Berrima Correctional Centre for $7 million was an outstanding result.
"I am excited to announce that Blue Sox Group is the successful proponent and will redevelop the site, carefully considering its heritage significance to the local community," Mr Roberts said.
"The proposal incorporates a boutique hotel whilst retaining the beautiful grounds of the estate, and will include café, restaurant, bar, community and event areas, and spaces which will cater for small business opportunities such as antique and book shops, personal services, art galleries, library and museum."
Minister for Corrections Geoff Lee said it was crucial that the winning proposal needed to consider the historical and cultural importance of the site.
"The Berrima Correctional Centre opened in 1839 and had many uses, including being a German prisoner camp during World War I, a training centre, and minimum-security prison for men that was later converted to also accommodate women," Mr Lee said.
"The NSW Government retired the correctional centre in 2020 and I'm excited to see how the site will be transformed."
Member for Goulburn Wendy Tuckerman said Property and Development NSW (PDNSW) conducted a rigorous Expressions of Interest (EOI) process.
"I am confident The EOI criteria was structured to ensure the successful proponent delivered a strong proposal that provided a broad range of social, economic and cultural benefits for Berrima and the Southern Highlands and that the community will embrace the vision the proponent has for this significant property," Ms Tuckerman said.
Blue Sox Group will also work with the community, local Indigenous groups and the Local Aboriginal Land Council on collaborative ideas to preserve and celebrate the wider site's heritage.
The State heritage-listed buildings on the site have the highest protections in place and will be preserved and protected.
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