The directed differentiation of human pluripotent stem cells (hPSCs) into defined populations has advanced regenerative medicine, especially for Parkinson's disease where clinical trials are underway. Despite this, tumorigenic risks associated with incompletely patterned and/or quiescent proliferative cells within grafts remain. Addressing this, donor stem cells carrying the suicide gene, thymidine kinase (activated by the prodrug ganciclovir, GCV), are employed to enable the programmed ablation of proliferative cells within neural grafts. However, coinciding the short half‐life of GCV with the short S‐phase of neural progenitors is a key challenge. To overcome this, a smart hydrogel delivery matrix is fabricatedto prolong GCV presentation. Following matrix embedment, GCV retains its functionality, demonstrated by ablation of hPSCs and proliferating neural progenitors in vitro. A prolonged GCV release is measured by mass spectrometry following the injection of a GCV‐functionalized hydrogel into mouse brains. Compared to suboptimal, daily systemic GCV injections, the intracerebral delivery of the functionalized hydrogel, as a “one‐off treatment”, reduce proliferative cells in both hPSC‐derived teratomas and neural grafts, without affecting the graft's functional unit (i.e., neurons). It is demonstrated that a functionalized biomaterial can enhance prodrug delivery and address safety concerns associated with the use of hPSCs for brain repair.