Background Population health planning within a health district requires current information on health profiles of the target population. Information obtained during primary care interactions may provide a valuable surveillance system for chronic disease burden. The Sentinel Practices Data Sourcing project aimed to establish a sentinel site surveillance system to obtain a region-specific estimate of the prevalence of chronic diseases and mental health disorders within the Illawarra-Shoalhaven region of New South Wales, Australia. Methods In September 2013, de-identified information for all patient interactions within the preceding 24 months was extracted and collated using a computerised chronic disease management program that has been designed for desktop application (Pen Computer Systems Clinical Audit Tool: TM (PCS CAT)). Collated patient data included information on all diagnosed pathologies and mental health indicators, clinical variables such as anthropometric measures, and patient demographic variables such as age, sex, geographical location of residence and indigenous status. Age-standardised prevalence of selected health conditions was calculated. Results Of the 52 general practices within the 6 major Statistical Local Areas (SLAs) of the health district that met the inclusion criteria, 17 consented to participate in the study, yielding data on n = 164,435 patients, and representing 39.7% of the regional population. Higher than national average estimates were found for the age-adjusted prevalence of chronic diseases such as obesity/overweight (65.9% vs 63.4%), hypertension (11.9% vs 10.4%) and anxiety disorders (5.0% vs 3.8%), but a lower than national average age-adjusted prevalence of asthma (8.0% vs 10.2%) was also identified. Conclusions This proof-of-concept study has demonstrated that the scope of data collected during patient visits to their general practitioners (GPs), facilitated through the Medicare-funded primary health care system in Australia, provides an opportunity for monitoring of chronic disease prevalence and its associated risk factors at the local level. Selection of sentinel sites that are representative of the population being served will facilitate an accurate and region-specific system for the purpose of population health planning at the primary care level.