Two decades in the city centre could be coming to an end for Birmingham Children’s Hospital, its chief executive has admitted.

Health bosses said the 300-bed Steelhouse Lane site, which has been the home of the hospital for more than 20 years, had “huge limitations”.

Sarah-Jane Marsh, chief executive of Birmingham Children’s Hospital NHS Foundation Trust, made the announcement two days after unveiling a new £2.5 million paediatric assessment unit.

She said a future move would cost £350 million, but believes it is vital if the hospital was to be viewed as a centre of excellence in specialist care.

Ms Marsh, who was speaking at a Health and Adults Overview meeting, said: “As a national leader, we will need an estate that’s fit for purpose.

“It’s clear the site has huge limitations. More and more people are using the hospital.

“The hospital was designed for another age and its layout means it can take a long time to get patients to theatre.

“Some of our general wards are not able to provide privacy for patients, some of the natural light is not great and the play facilities are not great.”

Ms Marsh said the possible move could cost as much as £350 million and would take many years to materialise.

Speculation the hospital could move on to the site of Queen Elizabeth Hospital, in Selly Oak, were quickly dismissed by Ms Marsh at the meeting.

In a report prepared for the committee, she suggested there were “external factors” influencing the proposal such as a potential redevelopment of the area under the city council’s Big City Plan. Modernising the hospital’s existing site is also being considered as an option.

“Could we develop our site in the future that’s fit for 21st century health care?” Ms Marsh asked.