The new single system will consolidate the dozens of medical filing and management systems in use across NSW Health.
Data from nine separate electronic medical records, 10 administration systems and five pathology laboratory information management systems is often unable to be shared or integrated in real time.
The current system for recording health records was "complex, cumbersome and outdated", Health Minister Ryan Park said in a statement.
Health staff are often chasing medical records from up to 15 local health districts, two specialty health networks and many NSW Health pathology laboratories across the state.
Mr Park said the system could create duplicative data collection or produce information gaps in decision making, prompting patients to have to recall and repeat complex medical information at a time when they were feeling unwell.
The new system aims to improve patient experience through better continuity of care and reduce the need for patients or their carers to recall and repeat health information.
Patients will be provided secure access to their medical data and their clinicians and care teams, no matter their location, will be able to access the same information about a patient.
Mr Park said it was about a more efficient way of delivering health care.
"A consolidated and centralised record-keeping system will provide a holistic and integrated view of the care a patient receives right across the NSW public health system," he said.
The system will differ to the My Health Record in that it can only be accessed by authorised NSW Health staff working across the state's public hospitals involved in a patient's care.
Patients will also have access to an online portal and NSW Health hospitals will continue to send discharge summaries and other information to a patient's My Health Record, if they have one.