Funded through the Labor Government's Regional Health Infrastructure Fund, the theatre redevelopment will increase EGHS's perioperative capability - reducing waiting lists in the region.

"I want to say how pleased I am to see the application of the $8.7 million that has flown through from the regional health infrastructure fund over the last few years as part of a $400 million dollar investment fund since 2016," Mr Foley said at the end of his tour.

"It has worked with regional and rural health services to deliver the support that they ask for in the circumstances and the priorities that health services have identified.

"It is all about making sure people have world class health services that they rightly demand as close to them as possible in this state."

The multi-million-dollar project which will redevelop and expand the hospital's theatre, radiology and pathology services, and relocate palliative care services.

More than $995,000 from the upgrade will purchase new theatre equipment, including surgical laparoscopic cameras, portable ultrasound machine, anaesthetic machine, ENT microscope, a diathermy unit as well as theatre beds and trolleys and a further $457,000 will upgrade fire detection systems.

Mr Foley thanked everyone involved in the project.

"People in the regions have a sense of ownership and a sense of buy in to their health services that is a real community strength," he said.

"That is something that this fund seeks seeks to make sure is amplified

"As we have seen over the course of the past two years it's been pretty hard going for our health services and the efforts that they have put in dealing with the pandemic, dealing with the day to day operations of the pandemic from testing and the management of positive cases particularity now in a high vaccinated environment."

Mr Foley acknowledged EGHS was a significant employer in town.

"I do look forward to coming back soon to see the full operation of the service and talk about what's next because we know that one project then creates momentum for the next.

"Getting that forward plan of infrastructure, getting that forward planning of what is means for better care in this community is just so important.

"To see $8.7 million leverage so well it just points to even further projects."

Mr Foley said he wasn't ruling out upgrades to other facilities in the area such as Willaura in the future.

"As I understand both its aged care, sub-acute and acute services are the priorities that we will work the health service as to where it sees the relative benefits," he said.

"We know that particularly when it comes to public residential aged care as a key component of making sure that as our community has aged that we have got quality public services in the communities," he said.

"If we wondered about the value of public residential services before the global pandemic, I don't think there is any wondering.

"They have shown themselves to be safer, higher quality and better outcomes during the pandemic and that is something that I think, reflective on the learnings of the pandemic, that we have seen increased support for public residential aged care.

"That campus also has other acute services and sub-acute and how they work into the mix with the health services model of care, we will take advice from the health field and we will get something."

Member for Western Victoria Jaala Pulford said the wider community will benefit from the upgrade.

"We are investing in hospitals right across the state and our dedicated doctors, nurses, other hospital staff and patients are set to benefit - including right here in our Grampians community," she said.

The Government established the RHIF in 2016/17 to assist regional and rural health services to improve the safety and quality of services, service capacity, models of care, patient and staff amenity, and service efficiency.

It has since funded more than 488 infrastructure projects.

The RHIF received a further boost in the Victorian Budget 2020/21 with an additional $20 million bringing total funding to $490 million. It is the largest program of its type in Victoria.