Gisborne Hospital has apologised after a worker at the recycling station found human tissue including bone fragments in a hospital rubbish bag.
One bag split and its contents fell out as it was loaded onto a rubbish truck on Thursday, while a second bag containing human tissue was found later during a search.
Tairawhiti District Health Board chief executive Jim Green says it appears human tissue was put in the wrong bag and taken to the transfer station with general hospital rubbish.
It was possible that the human tissue found in rubbish bags was probably obscured by other rubbish when staff were cleaning up after an operation.
Hospital and transfer station staff worked at the site to check all rubbish bags from the hospital on Thursday night.
Mr Green said he understands that the idea of fragments of human bones being found there would be extremely upsetting to many people.
However, he said there was never any risk to public health or safety and he believed it is an isolated incident.
Mr Green says the hospital has almost finished its investigation to determine the cause of the mistake.