A new remote witness room will be added to Penrith Courthouse by year's end.
Penrith MP Stuart Ayres says the facility will "help vulnerable people feel safer coming to court".
"These facilities give witnesses private and secure areas to prepare for court and to give their best evidence," he said.
It is anticipated the safe space will be utilised by sexual offence, domestic violence and other vulnerable complainants and witnesses.
Funding for the space comes as part of the $9 million COVID-19 Commonwealth stimulus funding package, and includes installation of audio-visual link technology and the upgraded secure safe rooms.
Attorney General and Prevention of Domestic and Sexual Violence Minister Mark Speakman said that court visits could be extremely stressful, specially for those who have been though serious trauma.
"This is particularly true for victim-survivors of domestic, family and sexual violence," he said.
"These works are part of our ongoing commitment to support victim-survivors if they choose to report to police, and to help them feel confident in coming to court."
Reforms passes last November, entitle complainants in domestic violence criminal matters and related apprehended domestic violence order proceedings to give evidence remotely via audio-visual link and in a closed court.
The works at Penrith Courthouse will be completed by Intrec Management Pty Ltd, with the start date to be finalised.