It has been the venue for glamorous costume parties, a hospital for hurt soldiers and the site of the death of Australia's first prime minister.

Now, one of Australia's grandest 20th-century hotels is returning to its former glory.

The Hydro Majestic, at Medlow Bath in the Blue Mountains, will reopen on Friday after being closed for almost a decade.

Over the past six years, the Hydro Majestic has undergone a $35 million transformation to restore some of its renowned grandeur and elegance.

Built in 1904 by retailer Mark Foy, the Hydro Majestic was a hydropathic spa until 1909.

It then became a luxurious hotel which was described as Mr Foy's "private lodge".

The dome in the casino room was bought by Mr Foy and shipped from Chicago to Sydney, then transported by bullock train over the Blue Mountains.

Interior designer Peter Reeve, who has been working to restore the hotel's original look, said the hotel had an "incredibly glamorous" past.

The Hydro Majestic was built in 1904. ( Supplied )

Huong Nguyen and George Saad bought the hotel in 2008 for $11 million. ( ABC News )

"It was a time when the British empire world fell in love with everything oriental," Mr Reeve said.

"We want to take people back to a time of incredible decadence and somewhat fun, a bit like an opium den."

Mr Reeve said Mr Foy was very wealthy and philanthropic.

"He bought luxurious furnishings, fantastic sculptures, great artworks, and [brought] a lot of very wealthy friends to his private lodge," he said.

Sorry, this video has expired Hydro Majestic to reopen after $35m restoration ( Philippa McDonald )

"[There were] lots of costume parties, there was a permanent band that played every night, there was a changing dinner menu every night, it was dress-for-dinner every night.

"There were costume parties on Friday nights where invariably every man would wear his wife's clothes and vice versa."

In 1920, the Hydro Majestic made headlines when Australia's first prime minister, Edmund Barton, had a heart attack and died there.

During World War II, it was used as a hospital for American soldiers.

The hotel's group general manager, Ralf Bruegger, said the Hydro Majestic was "quite run-down" when it was bought six years ago.

"But what you see now is a grand experience," he said.

"We wanted to bring it back to its glory days how it was when the Hydro Majestic was opened."

The Hydro Majestic hosted parties where "invariably every man would wear his wife's clothes and vice versa". ( Supplied )