The details of how warp drive operated were not yet fully realized by the time Star Trek: The Next Generation went into production. It was Rick Sternbach who decided that Main Engineering was where the matter/antimatter reaction needed for faster-than-light space travel would form.
The vertical warp core had already been introduced on Star Trek: The Motion Picture. The thinking at the time was that the antimatter would be in magnetic containment, centered around the keel at the bottom of the engineering hull, sending antimatter up into the reaction chamber.
The shaft above Engineering, however, did not make sense. There was no place where the “matter” was coming from.
Sternbach solved that problem on The Next Generation by establishing deuterium tanks at the top of the warp core, which provided the necessary matter.
“When the time came to do [The Next Generation],” he said, “Mike Okuda and I sat down over many pizzas and bowls of noodles to compile and clarify all of the information we had on impulse, warp, power generation and so on. The original series touched on many of these concepts but wasn’t clear or consistent, so we wrote a lot of memos which eventually became the TNG Technical Manual.”
The Engineering set of The Next Generation was a redress of the Star Trek: The Motion Picture version, erected on Paramount’s Stage 9. The structural elements of the second floor were kept intact while the rest of the set was rebuilt. It was given an open floorplan, with several corridors providing access to the room. The main corridor passing through the set was blocked from the second season onward, though.
The entire area was frequently redressed as a large corridor junction to allow for longer walking scenes.