Midbrain's ovoid 'relay station', vital for sleep function (8)

I believe the answer is:

thalamus

(Other definitions for thalamus that I've seen before include "Grey matter at base of brain" , "bit of brain" , "Sensory part of brain; a lush mat (anag.)" , "a bit of brains" .)

I've seen this clue in the Sydney Morning Herald.

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