Sydney West Area Health Service is consulting with state planning officials on the possibility of housing a $1.5 million data centre in a former convict women's prison.
The group demanded construction work on the site stop immediately and that its management is handed over to a different government department to preserve the site.
''You wouldn't think of putting a data room in Hyde Park Barracks or Port Arthur, so why here?'' author and action group spokesman Bonney Djuric told The Sydney Morning Herald.
The action group claimed on its website that "third class sleeping quarters, turnkeys apartment and third class yard [at the site] were at serious risk" under the Health data centre plan.
A spokesman for the Sydney West Area Health Service told iTnews the site was "one of several alternatives currently under consideration by NSW Health."
The spokesman said that the proposal was "currently being determined by the Heritage Branch" of the State Department of Planning.
"NSW Health awaits advice from local Council and the Heritage Branch before making any final decision on how best to proceed," the spokesman said.
The spokesman also played down the impact of existing construction work at the site and of the potential impact of housing a data centre within the historic buildings.
"Any work that has been undertaken on Building 105 to date has been minor and intended to preserve the life of the building, in recognition of its heritage value," the spokesman said.
"[In addition, the IT] equipment will be in a freestanding fully supported structure inside the building and will have no impact on the internal or external fabric of the site."
The Area Health Service said the data centre would be used to support clinical applications.