Defence personnel have begun clearing offices at Sydney's historic Victoria Barracks ahead of an enforced Christmas departure, defying state government appeals for the Commonwealth to abandon the multi-million-dollar divestment.

ABC News NSW reported that staff stationed inside the Paddington garrison have started packing boxes in anticipation of an end-of-year relocation, signalling that the federal government's planned disposal of the 13-hectare parcel remains firmly on track.

Christmas Exit Looms Over Historic Precinct

The quiet drawdown comes despite vocal opposition from NSW Premier Chris Minns, who has formally called on his federal Labor counterparts to halt the process and preserve the sandstone installation in public hands.

Constructed between 1841 and 1848 by convict labour, Victoria Barracks is widely regarded as one of Australia’s finest examples of military colonial architecture. For more than 170 years, it has served continuously as an active operational headquarters, housing high-ranking command elements, tactical units, and the Army Museum of NSW.

Insiders indicate that internal directives to pack up administrative units and prepare sensitive military materiel for transfer have ramped up over recent weeks. The rapid timeline has caught service members and civilian contractors by surprise, given the ongoing political debate surrounding the future of the heritage-listed precinct.

Macquarie Street Clashes With Canberra

The impending exit exposes rare public friction between Macquarie Street and the Albanese government. State authorities fear the Commonwealth's drive to streamline the Department of Defence estate will compromise public access and see one of Sydney’s most prized cultural assets privatised or parcelled off.

The state government has strongly lobbied Canberra to reconsider the sale, arguing the land must retain its civic and public character rather than being treated as a balance-sheet windfall. Local community groups and heritage advocates have echoed these sentiments, demanding that any transition guarantee total heritage protection and broad public access.

Federal authorities, however, have long viewed the prime Paddington real estate as an inefficient operational base for modern military requirements, with ongoing maintenance of centuries-old sandstone buildings drawing significant funding away from frontline capability.

Paddington Land Value Ignites Redevelopment Debate

With prime eastern suburbs land values commanding record sums, the potential commercial yield from Victoria Barracks is immense. Stretching along Oxford Street, the sprawling compound represents one of the largest single landholdings in inner Sydney.

While city planners and policy advocates have mooted options ranging from cultural facilities to expansive public parklands and housing, veterans' organisations remain anxious that the precinct’s military provenance could be erased. The federal Defence Strategic Review previously highlighted the imperative to rationalise inner-city holdings to fund capital upgrades elsewhere across Australia.

Long Farewell to an Inner-City Citadel

As personnel systematically box up archives and prepare to shift command functions to other bases across the Sydney basin, the prospect of the site standing empty looms large. Heritage specialists warn that leaving the substantial estate dormant post-Christmas invites security risks and fabric deterioration.

Unless federal ministers intervene to delay the relocation, the departure marks the end of an uninterrupted military presence that has shaped the cultural and geographic fabric of Paddington since the colonial era.