The NSW government will now solely fund four of five hospital upgrades that it had hoped to share with the private sector.
NSW Health Minister Brad Hazzard on Friday confirmed the government would go it alone in upgrading the Shellharbour Public Hospital at a cost of $251 million.
Mr Hazzard earlier in the year abandoned plans for public-private partnerships at Wyong and Bowral Hospitals, while in 2016 also shelved the plans for Goulburn.
Mr Hazzard said the government had decided against a PPP in Shellharbour after push back from the community.
"I promised the local community we would look at every option but after assessment of the expression of interest from providers, and after listening to community views, the NSW government has determined that a government-led approach is the best way forward," he said in a statement.
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The opposition the decision was a "victory for people power", while Unions NSW secretary Mark Morey described the initial PPP as a "toxic proposal".
"Credit for keeping Shellharbour Hospital in public hands is due solely to the activism of the local community, local hospital workers and their unions," Mr Morey said in a statement.
