The main building at the hospital was recently found to be earthquake prone at just 15 per cent of the New Building Standard.
Barry said mental health services in the Hutt Valley were in desperate need of an upgrade.
"To have Mark's generosity come in to fund that . . . it's just really outstanding news and a really positive thing to happen," he said.
He was at an awards night when the announcement was made.
"Our table, which had all Lower Hutt people at it, were all lost for words. We didn't know it was coming.
"It's just an incredible contribution to the Hutt Valley and an incredible contribution to the region on top of what we've already seen with the children's hospital."
Health Minister Andrew Little said the property developer's "generous offer" would benefit "not only the Wellington region, but will also have knock-on benefits for the rest of the country because the Government funding that was intended for the Hutt Valley unit can go into other projects".
"The Government committed to replacing Te Whare Ahuru, the hospital's 24-bed acute mental health unit, with a modern facility of the same size," Little said.
But Dunajtschik's offer, subject to final design of the project, meant it could be expanded.
"We can all be incredibly grateful for the extraordinary philanthropy of Mr Dunajtschik, who made New Zealand his home many years ago, has succeeded in business, and now wishes to give back to this country.
"I am glad to have had the opportunity to personally thank him for this donation and for the $50m he has already donated towards a new children's hospital for Wellington."
Dunajtschik, who is in his mid 80s, is among this country's most successful property developers and investors, although he only started in the industry as a "hobby" at the age of 57 and has no staff.
He caught media attention after his "unparalleled" commitment to build and donate the children's hospital.
Dunajtschik was born in the former Yugoslavia in 1935, but is of German ethnicity, which weighed in his favour when German troops occupied the country in 1941.
However, things changed after German forces retreated from Yugoslavia in 1944.
Dunajtschik was imprisoned by Yugoslav forces in a concentration camp at Knicanin, along the Danube River, together with thousands of other ethnically German Yugoslavs. Many died of starvation or disease, including Dunajtschik's grandmother.
He came to New Zealand in the late 1950s.
"This Government has commissioned a total of $578 million worth of mental health rebuilds around the country, with planning well-advanced for each. We've also allocated $87 million to grow the mental health workforce, on top of creating more than 900 new frontline roles currently funded for GP and community clinics," Little said.
Planning for the new Hutt Valley unit, to be called the Mark Dunajtschik Mental Health Centre, is well advanced. The project is being managed by Te Whatu Ora – Health New Zealand.
