The hospital is run by Nottinghamshire Healthcare NHS Trust, who provide mental-health and learning-disability services.

The opening was performed by Stephen Hay, chief operating officer at Monitor, the independent regulator of NHS Foundation Trusts.

Phase two of the project began in September 2005 and provides brand-new purpose-built services for patients.

It includes two new adult mental-health wards, one male and one female, with each having 16 bedrooms.

A new mental-health intensive-care unit enables patients to be assessed and treated in a safe and secure environment, while the new Maples therapy area offers a wide range of activities for patients.

Mr Hay, a senior figure in the modernisation of the NHS, unveiled an official plaque next to the unit's main entrance.

The opening event also gave the chance to see the new therapy areas on organised tours and highlighted the hard work and dedication that has gone into this project by staff, service users, carers and stakeholders.

The improvements, provided with an investment of more than £20 million, are part of a Private Finance Initiative (PFI).

Phase one, which began in 2004, created a new older-people's ward. The third and final phase, which begins shortly, will see a full upgrading of some existing wards and demolition of an old main building.

The Trust's executive director of local services, Simon Smith, said: "We are delighted with the developments on the Highbury site to date.

"Because the project has been so complex, it has required a huge amount of co-operation from all involved to ensure that the quality of patient care is not affected during the transformation.

"Already, patients and staff are seeing the benefits of having these modern improvements."