The first patients arrived at the Hospital for Consumptives, Waterfall on 14 April 1909, with initial provision for 180 men. A women's wing opened in May 1912 for 120; by 1919 it had become the largest sanatorium in New South Wales, holding 788 patients. The site sat at about 1,000 feet (305 m), 26 miles (42 km) south of Sydney, on the medical theory that tuberculosis needed 'high and rarefied atmosphere in the country away from the grime and pollution of cities'.
Patients in the active phase of tuberculosis lived in fibro chalets, each about the size of a garden shed. Larger ward buildings held the advanced and chronic cases. By 1914 the site carried 370 beds across the chalets and wards combined.
Sanatorium treatment was the dominant model for tuberculosis care in Australia from the late 19th century, anchored on fresh air, elevation, rest and isolation. Mid-century antibiotics and thoracic surgery transformed treatment, making the isolation regime unnecessary. Waterfall Sanatorium closed in 1958, joining a wider wind-down of sanatoria across New South Wales.
The site became Garrawarra Hospital from 1958, and is now the Garrawarra Centre for the Aged. The cemetery within the grounds holds approximately 2,000 graves, controlled by Wollongong Council. Some Waterfall-era buildings remain on the working aged-care site.