Nearby Railway Square will be redeveloped to feature Sydney's new 'Tech Central' precinct.

Technology giant Atlassian will become the anchor tenant in a towering new 40-storey timber development which will include the restoration of YHA Railway Square, the NSW Government has announced.

Once complete, the ‘Tech Central’ development will become a hub for IT innovation and technology, with the Australian-born IT giant Atlassian to base over 4,000 jobs at the site, which will become its new national headquarters.

The tower will soar above Central Station and YHA Railway Square, which has occupied the nearly 120-year-old heritage-listed former Inward Parcels Shed since 2004. The youth hostel will relocate into the new development, creating an opportunity to expand its capacity to nearly 500 beds, which includes shared dorms and private rooms.

In addition to hybrid timber, the building will comprise a glass and steel façade with solar panels built into the exterior, operating entirely on renewable energy from its first day. Atlassian has selected New York-based construction firm SHoP and Australian brand BVN to design and develop its new headquarters.

YHA Australia CEO, Paul McGrath, has offered the organisation’s full support to the transformation of the area into a world-class innovation hub.

The development will be the world’s tallest hybrid timber building.

“Many of today’s travellers are ‘digital nomads’, combining work with adventures in other countries,” McGrath said.

“There is a natural synergy between YHA’s guests – who are part of an international tech-savvy community – being co-located within a dynamic tech hub around Central Station and Railway Square in Sydney.”

Atlassian’s new tower will be the signature element of a significant redevelopment of the whole area, which will ultimately consist of 250,000 square metres of office space over an area stretching several blocks from Central Station to South Eveleigh.

NSW Premier, Gladys Berejiklian, said the site will become Sydney’s equivalent of Silicon Valley and will help it lure and retain some of the nation’s brightest IT innovators.

“Technology and innovation are key planks of the government’s strategy to attract investment and create the jobs of the future for the people of NSW,” Berejiklian said.

“We have some brilliant tech innovators and entrepreneurs in our state and Tech Central will help us retain local talent and attract some of the brightest minds in the world. This will be more important than ever as we recover from the pandemic.”