An immuno-compatible hydrogel system is provided that is resistant to protein binding. The hydrogel system is prepared by contacting a hydrogel solution with a cross-linking agent to form a gel, exposing the gel to an aqueous solution comprising a first polyelectrolyte to form a polyelectrolyte-coated hydrogel, exposing the polyelectrolyte-coated hydrogel to a second polyelectrolyte to form a crosslinked matrix and exposing the matrix to conditions which eliminates, or at least reduces, protein binding sites on the matrix.