Six patients in the transplant unit of Royal Prince Alfred Hospital, located in Sydney's inner west, were affected by the fungal outbreak from October to December 2025.
A NSW Health report released on Friday found a balcony accessible to the six people likely led to their infection, as it opened to a nearby construction area.
"While the investigation team was unable to determine a single conclusive cause of the outbreak, the balance of evidence indicates the balcony and nearby construction activities posed the greatest exposure risk," a NSW Health statement said.
The cause of the infection was Aspergillus, a common mould found in soil, dust and damp environments whose concentration in the air often increases during construction.
Though most people are unlikely to become unwell from Aspergillus, invasive fungal infections are often fatal for transplant patients, who often take medications that suppress their immune system.
Construction work, part of a $940 million redevelopment of the hospital, began near the transplant ward in March 2025.
Six months later, a nurse unit manager raised concerns about mould growth and water damage in patient rooms and bathrooms.
But they did not receive a response with a clear plan to address the issues.
A month later, three infection cases were diagnosed. By December, the group had doubled to six.
The rising number was reviewed by an infectious disease specialist but was not considered out of the ordinary or linked.
The hospital executive were notified two days later about the increase in infections due to Aspergillus and that a preliminary review was underway.
The ward subsequently closed and was only reopened after an expert panel, headed by NSW Chief Health Officer Kerry Chant, declared it safe on February 9.
Of the six infected patients, the two deaths were referred for a serious adverse event review.
A third patient was revealed to have died from multi-organ failure due to sepsis associated with a skin condition that was unrelated to the fungal infection.
Another remains in intensive care following their diagnosis in December.
The hospital has been urged to update its infection control management plan, ensure documents required before construction work include all known impacted areas and proposed risks, establish a process to prioritise maintenance and repair requests in high-risk areas and create a formal governance process to respond to any increases in infections during construction.
All four recommendations have been accepted by the health district.
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