Present Positron Emission Tomography (PET) detectors suffer from degradation of the spatial resolution due to the lack of depth-of-interaction (DOI) information leading to uncertainty in deducing the Lines of Response (LOR) between coincident events. The Centre for Medical Radiation Physics at the University of Wollongong has developed a novel detector module which will provide depth of interaction information while retaining the sensitivity of current scanners. This will result in superior imaging together with the ability to locate smaller lesions. This work focuses on preliminary investigations of the suitability of replacing the bulky scintillator crystals and photomultiplier tubes of traditional PET detector modules with compact 3 × 3 × 3 mm3 LYSO scintillator crystals individually coupled to Si photdetectors. The simulations were undertaken using GATE, a high level front end for GEANT4, specifically designed for use in the simulation of PET and SPECT. The simulation results quantify the level of improvement that can be potentially gained using a new detector module capable of providing a uniform spatial resolution across the entire field of view (FOV). Data is analysed using a newly developed sinogram binning technique. Simulation results show a resolution of 1.6 mm FWHM can be obtained for the entire FOV of this scanner (approximately 230 mm). This represents an improvement of approximately 75% in the resolution at the edges of field of view compared to traditional detector module design. Comparison of spatial resolution data for the novel detector module and phoswich detectors is also presented.