As I've used this forum as a source information for quite a while it only seemed fair to give back where I can.
Credits go to Ray Harper's excellent thread for RHD M54 cars as reference:
https://z4-forum.com/forum/viewtopic.php?f=2&t=92858
This guide applies to all N52-engined Z4 models:
2.5i Roadster (facelift only)
2.5si Roadster
3.0i Roadster (facelift only)
3.0Si Roadster
3.0Si Coupe
There are some slight differences in parts required between left-hand drive (LHD) and right-hand drive (RHD). These are marked in the text below. For those who may not be familiar with the terminology... LHD applies to vehicles from Europe, North America, etc. RHD applies to vehicles from UK, Australia, Japan, New Zealand, South Africa, etc
This guide should map quite well to M54-engined cars, with adjustments to take into account LF-20 instead of LF-30 steering pump. This should be limited to high-pressure line from pump to rack (specific to LF-20 steering pump - there are LHD and RHD versions), V-belt 6PK 1538 (11287636379) and mounting screw M8x22 (07119905739). There is a M54 mounting bracket for the reservoir (32411092940) with screw (7119904524) and 2x screw (7119905529).
Note that all steps in this conversion are in principle reversible. That means the car can be reverted to original condition if required in the future.
================== Disclaimer ====================
The steps in this thread are very much to be done at your own risk.
Technically this conversion is not highly complex to execute. However as the steering system is a safety-related function it is not be undertaken lightly.
In your geographical area, the conversion may need to be declared to insurance and/or local authorities. This is something you will need to check yourself before proceeding.
================ EPS adjustment ===================
Note that hydraulic steering conversion may not be desirable or suitable for many Z4 owners.
I would very much recommend adjusting EPS before considering hydraulic steering conversion.
https://z4-forum.com/forum/viewtopic.php?f=3&t=100725
================== Motivation =====================
My reasoning for this conversion. Basically, I wanted to achieve more accurate and linear steering feel.
On bumpy or uneven roads EPS made the car feel twitchy and on faster roads it tended to tramline or wander a bit. Also, as my car is occasionally used on racetracks, EPS continuously wanted to assist and adjust mid-corner making steering feel rubbery at best. As I'd taken all slack out of the car with new bushings and suspension it was quite obvious EPS was the issue that I needed to address.
=================== Parts List =====================
Intermediate Shaft
Z4M Intermediate Shaft (LHD) (32307836809)
Z4M Intermediate Shaft (RHD) (32307836811)
Almost impossible to find used. Basically consists of Z4 upper shaft paired with E46 lower shaft. For a workshop with access to the correct tools, it should be possible to inexpensively produce the intermediate shaft from used parts. That may be worth considering should BMW parts supply become exhausted in the future.
Purchased new from BMW
Steering rack
Basically a variety of BMW hydraulic steering racks could be used. However, a steering rack with a short gear ratio is preferable as it makes the vehicle feel livelier. A selection of steering racks and ratios: E46 15.4 / E46 facelift 13.7 / E46 M3 15.4 / E46 M3 CSL 14.5 / E85 Z4MR 13.7 / E86 Z4MC 12.8
For comparison - the ratio of the standard E85 / E86 steering rack should be 14.2.
By far the cheapest variant is the steering rack from the E46 facelift with a ratio of 13.7 - either a 'yellow tag' (7852974712(LHD)) or 'purple tag' (7852974678(LHD), 7852974679(RHD)). The yellow tag rack is rumoured to have been produced for US-market 330i ZHP with slightly heavier duty internals. However I found these racks advertised in salvage yards in Europe originating from a wide variety of E46 models.
Hoses (LHD)
The hoses are found on any LHD 6-cylinder petrol E46 variant - 320i, 325i or 328i. Salvage yards will often throw these parts in for free with a used steering rack. Be careful not to lose green O-ring in the high pressure line connector!
Required parts
Line from reservoir to pump (32416750155, part 1 in diagram)
High-pressure line from pump to rack (32416774215, part 3 in diagram) - specific to LF-30 steering pump
Line from rack to cooler (32416796367, part 7 in diagram)
Cooler return line (32416796390, part 11 in diagram)
Additionally source:
Cooling loop (17111436262, part 10 in diagram) (any E46)
Reservoir (32416851217, at top of diagram) (any modern BMW)
For reference diagram of parts:

Hoses (RHD)
The hoses are found on any RHD 6-cylinder petrol E46 variant - 320i, 325i or 328i. Salvage yards will often throw these parts in for free with a used steering rack. Be careful not to lose green O-ring in the high pressure line connector!
Required parts
Line from reservoir to pump (32411095526, part 1 in diagram)
High-pressure line from pump to rack (32416764728, part 3 in diagram) - specific to LF-30 steering pump
Line from rack to cooler (32416774214, part 4 in diagram)
Cooler return line (32416796390, part 14 in diagram)
Additionally source:
Cooling loop (17111436262, part 13 in diagram) (any E46)
Reservoir (32416851217, at top of diagram) (any modern BMW)
For reference diagram of parts:

Pump
The steering pump is found on N52-engined E90 variants - 323i, 325i or 330i. Ensure the pump includes pulley and rear mounting bracket.
LUK LF30 pump (32416769887)
For reference image of pump with attached bracket:

Miscellaneous
You'll require various parts which are cheap and easy to source new from BMW.
Reservoir mounting bracket (32416768096) - (could be sourced from any E90)
Screwset power steering pump (32420392609)
Pulley (11287535860)
V-belt 6PK 1990 (11287628650)
Blind rivet (51718219511) 6x (for remounting front bumper)
================== Preparation =====================
Prepare beforehand by spraying WD40 liberally on tierods of hydraulic steering rack.
To reduce installation time, the mounting bracket for the reservoir could be fabricated beforehand.
=================== Conversion ====================
The installation work was performed at my trusted BMW mechanic. Having a lift really helps.
Total installation time - including fabricating reservoir mounting bracket and tracking - circa 8 hours.
============== Step 1 - installing hydraulic steering rack ========
Remove under engine compartment covers as well as aluminum reinforcement plate
Disconnect tierods, disconnect intermediate shaft and mounting bolts for steering rack.
Remove steering rack. Remove intermediate shaft.
Install Z4M intermediate shaft, install hydraulic steering rack, connect tierods.
============== Step 2 - removing EPS motor ===============
Remove under-dash paneling.
Remove 2 bolts holding EPS motor and wrestle it out.
Disconnect wiring.
Re-install under-dash paneling.
For driveway mechanics... you theoretically (after wheel alignment) have a drive-able car again albeit with quite heavy steering.
============ Step 3 - installing hydraulic pump ==============
Loosen tensioner for V-belt, remove V-belt.
Unused mounting holes for the LF30 hydraulic pump are present on the engine block. Run a thread tap through the mounting holes as they are likely dirty and oxidized. Install hydraulic pump using new bolts (see set above).
Install additional pulley on alternator - pulley set comes with bolt and dust cap.
Install new V-belt and tighten tensioner.
Install high-pressure hose from pump to rack.
For reference routing of new V-belt over pump and new pulley:

============= Step 4 - installing cooling loop ===============
Remove front bumper. Provisionally install cooling loop, you'll need to cut away some plastic beside the radiator to route hoses.
Install hose from rack to cooling loop.
Provisionally install hose from cooling loop to reservoir.
Interestingly, the right-hand radiator support on all Z4 bodyshells stems from the E46 and already contains the mounting tab for the cooling loop, just much higher than required. Cut mounting tab loose, mount on cooling loop with ziptie and screw/glue in place in the correct location on radiator support.
Alternatively, the mounting tab could be left in the higher original location. This will require adjustments to length of hoses to cooling loop, additionally radiator hoses may be in the way.
For reference mounting tab for cooling loop:

============== Step 5 - installing reservoir ================
Next a place will need to be found to mount the reservoir. Ideally it's located higher than the pump however available space in the left front of the engine bay is limited. A suitable location is located on the lower schock tower, additionally at this exact point there are also 2 unused welded nuts on the shock tower itself.
Start by removing the air filter housing to obtain access. Here various N52-engined Z4 models differ. Airbox shape and intake ducting vary, also some models have sound generator and associated ducting.
(From what can be seen in the parts manual, there should be sufficient space for the reservoir if there is no sound generator.)
For our 3.0Si we chose to modify part of the sound generator, where there is a fist-sized resonator chamber sticking downwards. This was cut off and ground down leaving a round hole which was capped off. By doing this space was created next to the lower shock tower.
For reference sound generator modification:

(Alternatively, an option for models with sound generator may be to install aftermarket open air filter which opens up space for the reservoir further forward in the engine compartment)
A mounting bracket was fabricated to fix the reservoir to the shock tower. The reservoir was attached to the bracket using the stock E90 reservoir mount.

Install hose from pump to reservoir. The hose from cooling loop to reservoir is the only one that requires modification. Either use an additional spare E46 hose or cut hose and lengthen with piece of metal tubing and hose clamps.
================== Step 6 - tidying up =================
Fill hydraulic system with red hydraulic fluid as used in BMW E46 models.
Start engine. Turn steering from lock to lock to remove air bubbles. Check hose connectors for leaks. Top up reservoir if required.
Re-install air filter housing.
Re-install front bumper (you'll require new blind rivets in the wheel wells).
Re-install aluminum reinforcement plate and under engine compartment covers.
============== Step 7 - wheel alignment =================
Perform wheel alignment.
============== Step 8 - EPS warning light =================
After removing the EPS motor, the EPS warning light will be permanently illuminated on the instrument cluster.

There are various options to address this.
1 - open instrument cluster and cover the EPS warning light
2 - remove axle from EPS motor and reinstall on steering column
3 - recode software to ignore lack of EPS motor
With options 1 and 2, the modification is not easily reversible.
Option 3 is a proper solution.
The following webpage was quite helpful in determining what needed to be done.
http://www.oliverhaas.net/thema/ncs-expert-codieranleitung-fur-bmw-fahrzeuge.html
http://www.oliverhaas.net/bmw/bmw-steuergerat-akmb.html
To switch off the EPS warning light you'll require access to a laptop with BMW INPA software. There are numerous technicians with this software package - start by asking on this forum or your local BMW specialist. Within the INPA software package is a tool called NCS Expert for reading, troubleshooting and recoding BMW ECU's.
The EPS warning light is controlled by one of the main ECU's in the E85 Z4 - the AKMB ECU. As the AKMB ECU is universal to various Z4 variants - the presence of optional systems such as automatic gearbox, convertible roof, regional acoustic warnings and EPS can be configured.
Using NCS Expert the parameter settings of the AKMB ECU can be modified. To disable EPS warning light, the parameter 'EPS' needs to be changed from 'aktiv' to 'nicht_aktiv'.

For someone experienced with BMW INPA software, the above procedure will only take a few minutes. This step is straightforward and remuneration should not be more than order of magnitude of a crate of beer. After switching ignition off and on, the EPS warning light is disabled permanently. As mentioned earlier, this step is easily reversible in case EPS is reinstalled in the future.

============== Step 9 - Legalities ======================
In your geographical area, the conversion may need to be declared to insurance and/or local authorities.
This is something you will need to check yourself.
Credits go to Ray Harper's excellent thread for RHD M54 cars as reference:
https://z4-forum.com/forum/viewtopic.php?f=2&t=92858
This guide applies to all N52-engined Z4 models:
2.5i Roadster (facelift only)
2.5si Roadster
3.0i Roadster (facelift only)
3.0Si Roadster
3.0Si Coupe
There are some slight differences in parts required between left-hand drive (LHD) and right-hand drive (RHD). These are marked in the text below. For those who may not be familiar with the terminology... LHD applies to vehicles from Europe, North America, etc. RHD applies to vehicles from UK, Australia, Japan, New Zealand, South Africa, etc
This guide should map quite well to M54-engined cars, with adjustments to take into account LF-20 instead of LF-30 steering pump. This should be limited to high-pressure line from pump to rack (specific to LF-20 steering pump - there are LHD and RHD versions), V-belt 6PK 1538 (11287636379) and mounting screw M8x22 (07119905739). There is a M54 mounting bracket for the reservoir (32411092940) with screw (7119904524) and 2x screw (7119905529).
Note that all steps in this conversion are in principle reversible. That means the car can be reverted to original condition if required in the future.
================== Disclaimer ====================
The steps in this thread are very much to be done at your own risk.
Technically this conversion is not highly complex to execute. However as the steering system is a safety-related function it is not be undertaken lightly.
In your geographical area, the conversion may need to be declared to insurance and/or local authorities. This is something you will need to check yourself before proceeding.
================ EPS adjustment ===================
Note that hydraulic steering conversion may not be desirable or suitable for many Z4 owners.
I would very much recommend adjusting EPS before considering hydraulic steering conversion.
https://z4-forum.com/forum/viewtopic.php?f=3&t=100725
================== Motivation =====================
My reasoning for this conversion. Basically, I wanted to achieve more accurate and linear steering feel.
On bumpy or uneven roads EPS made the car feel twitchy and on faster roads it tended to tramline or wander a bit. Also, as my car is occasionally used on racetracks, EPS continuously wanted to assist and adjust mid-corner making steering feel rubbery at best. As I'd taken all slack out of the car with new bushings and suspension it was quite obvious EPS was the issue that I needed to address.
=================== Parts List =====================
Intermediate Shaft
Z4M Intermediate Shaft (LHD) (32307836809)
Z4M Intermediate Shaft (RHD) (32307836811)
Almost impossible to find used. Basically consists of Z4 upper shaft paired with E46 lower shaft. For a workshop with access to the correct tools, it should be possible to inexpensively produce the intermediate shaft from used parts. That may be worth considering should BMW parts supply become exhausted in the future.
Purchased new from BMW
Steering rack
Basically a variety of BMW hydraulic steering racks could be used. However, a steering rack with a short gear ratio is preferable as it makes the vehicle feel livelier. A selection of steering racks and ratios: E46 15.4 / E46 facelift 13.7 / E46 M3 15.4 / E46 M3 CSL 14.5 / E85 Z4MR 13.7 / E86 Z4MC 12.8
For comparison - the ratio of the standard E85 / E86 steering rack should be 14.2.
By far the cheapest variant is the steering rack from the E46 facelift with a ratio of 13.7 - either a 'yellow tag' (7852974712(LHD)) or 'purple tag' (7852974678(LHD), 7852974679(RHD)). The yellow tag rack is rumoured to have been produced for US-market 330i ZHP with slightly heavier duty internals. However I found these racks advertised in salvage yards in Europe originating from a wide variety of E46 models.
Hoses (LHD)
The hoses are found on any LHD 6-cylinder petrol E46 variant - 320i, 325i or 328i. Salvage yards will often throw these parts in for free with a used steering rack. Be careful not to lose green O-ring in the high pressure line connector!
Required parts
Line from reservoir to pump (32416750155, part 1 in diagram)
High-pressure line from pump to rack (32416774215, part 3 in diagram) - specific to LF-30 steering pump
Line from rack to cooler (32416796367, part 7 in diagram)
Cooler return line (32416796390, part 11 in diagram)
Additionally source:
Cooling loop (17111436262, part 10 in diagram) (any E46)
Reservoir (32416851217, at top of diagram) (any modern BMW)
For reference diagram of parts:

Hoses (RHD)
The hoses are found on any RHD 6-cylinder petrol E46 variant - 320i, 325i or 328i. Salvage yards will often throw these parts in for free with a used steering rack. Be careful not to lose green O-ring in the high pressure line connector!
Required parts
Line from reservoir to pump (32411095526, part 1 in diagram)
High-pressure line from pump to rack (32416764728, part 3 in diagram) - specific to LF-30 steering pump
Line from rack to cooler (32416774214, part 4 in diagram)
Cooler return line (32416796390, part 14 in diagram)
Additionally source:
Cooling loop (17111436262, part 13 in diagram) (any E46)
Reservoir (32416851217, at top of diagram) (any modern BMW)
For reference diagram of parts:

Pump
The steering pump is found on N52-engined E90 variants - 323i, 325i or 330i. Ensure the pump includes pulley and rear mounting bracket.
LUK LF30 pump (32416769887)
For reference image of pump with attached bracket:

Miscellaneous
You'll require various parts which are cheap and easy to source new from BMW.
Reservoir mounting bracket (32416768096) - (could be sourced from any E90)
Screwset power steering pump (32420392609)
Pulley (11287535860)
V-belt 6PK 1990 (11287628650)
Blind rivet (51718219511) 6x (for remounting front bumper)
================== Preparation =====================
Prepare beforehand by spraying WD40 liberally on tierods of hydraulic steering rack.
To reduce installation time, the mounting bracket for the reservoir could be fabricated beforehand.
=================== Conversion ====================
The installation work was performed at my trusted BMW mechanic. Having a lift really helps.
Total installation time - including fabricating reservoir mounting bracket and tracking - circa 8 hours.
============== Step 1 - installing hydraulic steering rack ========
Remove under engine compartment covers as well as aluminum reinforcement plate
Disconnect tierods, disconnect intermediate shaft and mounting bolts for steering rack.
Remove steering rack. Remove intermediate shaft.
Install Z4M intermediate shaft, install hydraulic steering rack, connect tierods.
============== Step 2 - removing EPS motor ===============
Remove under-dash paneling.
Remove 2 bolts holding EPS motor and wrestle it out.
Disconnect wiring.
Re-install under-dash paneling.
For driveway mechanics... you theoretically (after wheel alignment) have a drive-able car again albeit with quite heavy steering.
============ Step 3 - installing hydraulic pump ==============
Loosen tensioner for V-belt, remove V-belt.
Unused mounting holes for the LF30 hydraulic pump are present on the engine block. Run a thread tap through the mounting holes as they are likely dirty and oxidized. Install hydraulic pump using new bolts (see set above).
Install additional pulley on alternator - pulley set comes with bolt and dust cap.
Install new V-belt and tighten tensioner.
Install high-pressure hose from pump to rack.
For reference routing of new V-belt over pump and new pulley:

============= Step 4 - installing cooling loop ===============
Remove front bumper. Provisionally install cooling loop, you'll need to cut away some plastic beside the radiator to route hoses.
Install hose from rack to cooling loop.
Provisionally install hose from cooling loop to reservoir.
Interestingly, the right-hand radiator support on all Z4 bodyshells stems from the E46 and already contains the mounting tab for the cooling loop, just much higher than required. Cut mounting tab loose, mount on cooling loop with ziptie and screw/glue in place in the correct location on radiator support.
Alternatively, the mounting tab could be left in the higher original location. This will require adjustments to length of hoses to cooling loop, additionally radiator hoses may be in the way.
For reference mounting tab for cooling loop:

============== Step 5 - installing reservoir ================
Next a place will need to be found to mount the reservoir. Ideally it's located higher than the pump however available space in the left front of the engine bay is limited. A suitable location is located on the lower schock tower, additionally at this exact point there are also 2 unused welded nuts on the shock tower itself.
Start by removing the air filter housing to obtain access. Here various N52-engined Z4 models differ. Airbox shape and intake ducting vary, also some models have sound generator and associated ducting.
(From what can be seen in the parts manual, there should be sufficient space for the reservoir if there is no sound generator.)
For our 3.0Si we chose to modify part of the sound generator, where there is a fist-sized resonator chamber sticking downwards. This was cut off and ground down leaving a round hole which was capped off. By doing this space was created next to the lower shock tower.
For reference sound generator modification:

(Alternatively, an option for models with sound generator may be to install aftermarket open air filter which opens up space for the reservoir further forward in the engine compartment)
A mounting bracket was fabricated to fix the reservoir to the shock tower. The reservoir was attached to the bracket using the stock E90 reservoir mount.

Install hose from pump to reservoir. The hose from cooling loop to reservoir is the only one that requires modification. Either use an additional spare E46 hose or cut hose and lengthen with piece of metal tubing and hose clamps.
================== Step 6 - tidying up =================
Fill hydraulic system with red hydraulic fluid as used in BMW E46 models.
Start engine. Turn steering from lock to lock to remove air bubbles. Check hose connectors for leaks. Top up reservoir if required.
Re-install air filter housing.
Re-install front bumper (you'll require new blind rivets in the wheel wells).
Re-install aluminum reinforcement plate and under engine compartment covers.
============== Step 7 - wheel alignment =================
Perform wheel alignment.
============== Step 8 - EPS warning light =================
After removing the EPS motor, the EPS warning light will be permanently illuminated on the instrument cluster.

There are various options to address this.
1 - open instrument cluster and cover the EPS warning light
2 - remove axle from EPS motor and reinstall on steering column
3 - recode software to ignore lack of EPS motor
With options 1 and 2, the modification is not easily reversible.
Option 3 is a proper solution.
The following webpage was quite helpful in determining what needed to be done.
http://www.oliverhaas.net/thema/ncs-expert-codieranleitung-fur-bmw-fahrzeuge.html
http://www.oliverhaas.net/bmw/bmw-steuergerat-akmb.html
To switch off the EPS warning light you'll require access to a laptop with BMW INPA software. There are numerous technicians with this software package - start by asking on this forum or your local BMW specialist. Within the INPA software package is a tool called NCS Expert for reading, troubleshooting and recoding BMW ECU's.
The EPS warning light is controlled by one of the main ECU's in the E85 Z4 - the AKMB ECU. As the AKMB ECU is universal to various Z4 variants - the presence of optional systems such as automatic gearbox, convertible roof, regional acoustic warnings and EPS can be configured.
Using NCS Expert the parameter settings of the AKMB ECU can be modified. To disable EPS warning light, the parameter 'EPS' needs to be changed from 'aktiv' to 'nicht_aktiv'.

For someone experienced with BMW INPA software, the above procedure will only take a few minutes. This step is straightforward and remuneration should not be more than order of magnitude of a crate of beer. After switching ignition off and on, the EPS warning light is disabled permanently. As mentioned earlier, this step is easily reversible in case EPS is reinstalled in the future.

============== Step 9 - Legalities ======================
In your geographical area, the conversion may need to be declared to insurance and/or local authorities.
This is something you will need to check yourself.