One of Australia’s oldest and most notorious prisons could be sold off to make room for thousands of new homes under a plan proposed by the state opposition.

A bold $3 billion plan would see the site bulldozed to build up to 12,000 homes if the opposition is elected in 2027.

NSW Opposition Leader Mark Speakman said Long Bay could help answer the state’s housing crisis.

“We want to turn the relic of [the] past into hope and homes for the next generation,” Speakman said today.

“We know there will be a surplus from this proposal that will be available to reinvest in local schools, in local hospitals if that’s necessary, in open spaces and local roads and in providing public transport.”

About 30 per cent of the development would be for social and affordable housing.

Current inmates wouldn’t move until a new facility was built.

Illawarra on the NSW South Coast has been flagged as a possible location for a new correctional complex.

NSW Premier Chris Minns said new homes in Sydney should be built near public transport hubs.

“There’s no train station at Long Bay, there’s no train station at Maroubra,” Minns said.

“If we’re going to build and have more density closer to the city, it’s got to be on public transport lines otherwise we just keep repeating the mistakes of the past.”

In response, opposition transport spokeswoman Natalie Ward said a Liberal government would prioritise public transport options if Long Bay was transformed into new housing.

“We will look at future transport options, but that from day one, as we’ve done on the Northern beaches, that there will be a rapid express bus line service to get them to jobs from here to Kingsford and into the city,” Ward said.