In June 1943 the town clerk of the City of Kew, W. D. Birrell, produced a report on the immediate post-war priorities for Kew.
Birrell strongly urged the council to propose the closure of Kew Asylum, with the grounds to be subdivided and "...laid out on modern town planning principles with some 700 to 800 homes".
According to Birrell, this would have been an ideal post-war scheme as it would provide employment and much needed land for housing.
Birrell's proposal was not new; ever since the establishment of the asylum, proposals for its closure and redevelopment had recurred every few years.
Birrell's plans did not eventuate as overcrowding at other mental hospitals throughout Victoria necessitated Kew's continued operation.

By 1986 Willsmere Hospital's bed numbers had been reduced to 430, three quarters of which were for psychogeriatric patients.

As a result of ongoing mental health reform, the then Labor Government of Victoria commissioned the "Willsmere Project", the purpose of which was to plan for decommissioning the hospital and develop services and facilities in the community.
 Long-term psychogeriatric patients were transferred to new psychogeriatric nursing homes in the suburbs, to a re-opened ward of Plenty Psychiatric Hospital in Bundoora, to the refurbished Heatherton Tuberculosis Sanatorium or to other psychiatric institutions.
Acutely unwell patients that would have previously been admitted to Willsmere were now sent to newly built units at Maroondah Hospital, Monash Medical Centre or Peninsula Hospital.

Willsmere was finally closed in December 1988 and sold by the Government of Victoria in the late 1980s.
An extensive conservation analysis was completed in 1988 that recommended the bulk of the original buildings be conserved.

The hospital complex was eventually developed by Central Equity into residential apartments.
 The Willsmere residential development was officially opened on 27 October 1993 by Premier Jeff Kennett.

The remaining grasslands between the Eastern Freeway and the main hospital buildings, including the site of the asylum's cricket field were developed as the Kew Gardens residential estate.
The Kew Gardens project was completed in 1995.
 The buildings and grounds of the Kew Cottages (formerly the grounds of Kew Asylum) were redeveloped as the "Main Drive" project by Walker Corporation.

One of the conditions of the development permit from the Historic Buildings Council required that a section of the building be set aside and maintained as a museum that documented the history of the site.
 This led to the creation of an interpretive display in a section of the old "Female Paying Patients Ward", development of an archive and resource collection consisting of the few remaining records and artifacts left behind when Central Equity gained control of the site from A.V. Jennings.
The archive and resource collection was created by the Australian Science Archives Project (ASAP) at the University of Melbourne.
In June 1943 the town clerk of the City of Kew, W. D. Birrell, produced a report on the immediate post-war priorities for Kew. Birrell strongly urged the council to propose the closure of Kew Asylum, with the grounds to be subdivided and "...laid out on modern town planning principles with some 700 to 800 homes". According to Birrell, this would have been an ideal post-war scheme as it would provide employment and much needed land for housing. Birrell's proposal was not new; ever since the establishment of the asylum, proposals for its closure and redevelopment had recurred every few years. Birrell's plans did not eventuate as overcrowding at other mental hospitals throughout Victoria necessitated Kew's continued operation.
By 1986 Willsmere Hospital's bed numbers had been reduced to 430, three quarters of which were for psychogeriatric patients.
As a result of ongoing mental health reform, the then Labor Government of Victoria commissioned the "Willsmere Project", the purpose of which was to plan for decommissioning the hospital and develop services and facilities in the community.  Long-term psychogeriatric patients were transferred to new psychogeriatric nursing homes in the suburbs, to a re-opened ward of Plenty Psychiatric Hospital in Bundoora, to the refurbished Heatherton Tuberculosis Sanatorium or to other psychiatric institutions. Acutely unwell patients that would have previously been admitted to Willsmere were now sent to newly built units at Maroondah Hospital, Monash Medical Centre or Peninsula Hospital.
Willsmere was finally closed in December 1988 and sold by the Government of Victoria in the late 1980s. An extensive conservation analysis was completed in 1988 that recommended the bulk of the original buildings be conserved.
The hospital complex was eventually developed by Central Equity into residential apartments.  The Willsmere residential development was officially opened on 27 October 1993 by Premier Jeff Kennett.
The remaining grasslands between the Eastern Freeway and the main hospital buildings, including the site of the asylum's cricket field were developed as the Kew Gardens residential estate. The Kew Gardens project was completed in 1995.  The buildings and grounds of the Kew Cottages (formerly the grounds of Kew Asylum) were redeveloped as the "Main Drive" project by Walker Corporation.
One of the conditions of the development permit from the Historic Buildings Council required that a section of the building be set aside and maintained as a museum that documented the history of the site.  This led to the creation of an interpretive display in a section of the old "Female Paying Patients Ward", development of an archive and resource collection consisting of the few remaining records and artifacts left behind when Central Equity gained control of the site from A.V. Jennings. The archive and resource collection was created by the Australian Science Archives Project (ASAP) at the University of Melbourne.
Kew Asylum