The New South Wales Health Minister has apologised for a "devastating error" which saw two newborns given laughing gas instead of oxygen - one of whom died.
The babies were given nitrous oxide instead of oxygen at the Bankstown-Lidcome Hospital in southwest Sydney in the last two months.
Mother Sonya Ghanem told Channel Nine she woke up from a caesarean to be told her son was dead.
"I held my baby, they brought him to me at the hospital, I said 'I want to see him', just looking at him, shaking, 'my son, wake up, what did they do to you?'"
The second baby is suspected to have suspected brain damage.
In a statement, Health Minister Jillian Skinner said a machine in the neo-natal resuscitation unit in an operating theatre was incorrectly installed.
She says the hospital has checked all eight operating theatres and found one the fault in only one theatre.
"I deeply regret these families have suffered through such a devastating error."
The installation mistake was found after a paediatrician raised concerns about the death of one of the babies, ABC reports.
While the oxygen outlet was incorrectly installed by industrial products company BOC in July 2015, Ms Skinner said hospital management was certain no other babies had received gas from that outlet.
BOC says it is cooperating fully with all investigations by the Government, hospital, coroner and Ministry of Health. It will also be conducting its own internal investigation.
"We deeply regret that these families are suffering pain and sorrow," BOC said in a statement.
The botch-up has led to Labor's health spokesman Walt Secord to ask for an independent review.