The NSW Department of Education has acquired TAFE North Sydney Institute's Crows Nest Campus for nearly $25 million, with all of the proceeds from the sale to be re-invested into three other TAFE NSW campuses that are expected to accommodate staff and students from Crows Nest.

"Most programs and services currently delivered from Crows Nest will be relocated over the next 18 months to two years to St Leonards campus," a spokesman for Minister for Skills John Barilaro said. "Some teaching delivery will be relocated to other campuses including Ryde and Northern Beaches."

Work on the new high school, including the establishment of an opening date and the site's capacity, will begin in about 18 months after TAFE vacates the campus, a spokeswoman for Minister for Education Adrian Piccoli said.

"Once they vacate the site we'll be able to look at the configuration and figure out an opening date and student numbers," she said.

The new high school will cater to students from the nearby year 7-10 Cammeraygal High School, which was built on the site of Bradfield College. It opened in January this year with 120 year 7 students and has a total capacity of 480 students.

"Demand for public education is strong in northern Sydney," Mr Piccoli said.

Along with Cammeraygal, two other new high schools, three public schools and two special needs schools opened in NSW in January.

The government has committed $1 billion in funding for 1600 new and upgraded classrooms, as schools across the state reach or exceed their capacity. This includes a $200 million program to rebuild two high schools in Parramatta, and build a new high school in the inner city and in Ballina.

TAFE is also facing its own crisis, with student numbers in NSW institutions falling by more than 83,000 in the three years since 2012. This has been partially attributed to the government's controversial Smart and Skilled reforms that have seen a substantial rise in fees for many courses.