​A damning inquiry has exposed the "traumatising" use of seclusion and restraint in NSW mental health units and emergency department 'safe rooms', describing entrenched discrimination, stigma and prison-like punishment many patients are subject to.

The independent review into restrictive practices in NSW mental health settings was released on Monday after months of public forums, submissions and inspections of psychiatric units and EDs.

The report was dedicated to Miriam Merten, whose distressing treatment at Lismore Base Hospital's mental health unit was the catalyst for the report.

Patients and their families described services "that traumatise and show a lack of compassion and humanity" including a culture that promoted strip-searching and other punitive methods, according to the report.

The review led by NSW chief psychiatrist Dr Murray Wright detailed instances of patients being "trapped, claustrophobic and agitated" in seclusion rooms "built like prisons" with no access to bathrooms or fresh air.