"There has been a significant increase in the Indigenous prison population ... In the last decade, the Indigenous prison population in New South Wales has increased by 87 per cent, rising from 1265 in 1999 to 2374 in 2009," said McClelland.

"It is clear the high rate of imprisonment has had a disproportionate impact on Indigenous Australians, who currently comprise one in four of the Australian prison population ... It is clear that [the RALS's] workload is increasing rather than decreasing."

McClelland was joined at the ceremony by the NSW Director of Public Prosecutions, Nicholas Cowdery AM QC, the Hon. Justice Peter Hidden AM and the Hon. Graeme Henson.

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The refurbishment was made possible by additional funds pledged by the Federal Government earlier this year for Aboriginal legal services.

The RALS was established in 1970 in response to a need for legal assistance to Aboriginal people in the area and was initially staffed with volunteer lawyers and members of the Redfern Aboriginal community.

Since then, the service has grown significantly, and according to McClelland, it plays a crucial role in addressing the issue of over-representation of Aboriginal people in prison.

"We need to work together to address these alarming statistics," he said.

"Improvements in the areas of health, education, employment and housing will not only help to close the gap in a broad sense - they will also help to reduce Indigenous contact specifically with the criminal justice system."

McClelland said the Federal Government is also looking at ways to support ambitious initiatives like justice reinvestment, trials of innovative policing models in Indigenous communities, arrangements so that "the first door is the right door" for victims of violence, and for alcohol supply reduction strategies.

"We want to test whether these things work and promote successful ideas to the States and Territories," he said.