Malaysian sultan buys WA riverfront land

Part of Perth's old Sunset Hospital has been sold to Malaysia's Sultan of Johor for $8.5 million but the West Australian premier says it will not affect the heritage-listed site.

Colin Barnett said the entire area was about 8.5 hectares, but only 1900sqm - or about two per cent of the total site - was sold in the space below the heritage buildings.

"It's just a prime piece of riverfront real estate," he told 6PR on Thursday.

"It won't impact on the heritage site at all."

Mr Barnett told parliament on Wednesday that the money would go towards redeveloping the remainder of the site.

After landscaping is completed and the exterior of the buildings are restored, they will be offered for lease to not-for-profit organisations or educational institutions.

Mr Barnett said he expected the area to be open to the public within two years.

"Very few people have walked through it. It is basically, a 100-year-old village in pristine condition with about a dozen large constructed buildings," he told parliament.

"Along with New Norcia, it is probably the most significant collection of heritage buildings in Western Australia."