The money will be spent on rebuilding the operating theatre and establish day procedure beds. It also aims to improve infrastructure and sterilisation procedures.

The funding comes from the state government’s, Regional Health Infrastructure Fund.

The fund was established to support projects that can make a difference and meet demands in regional areas.

Ms Hennessy said the funding would enable East Grampians Health Service to provide safe operating space for the staff and community.

After the upgrades, East Grampians Health Service will be able to provide more day procedures.

“Day procedure beds are essential because there are so many less serious surgical interventions done by day surgery and making sure health services have the capability to do that safely for clinicians and patients is absolutely essential,” Ms Hennessy said.

Ms Hennessy said the project would create up to 9 local construction jobs.

“When there has been infrastructure builds ... (East Grampians Health Service) have utilised their procurement power to support local businesses and local construction services as much as possible,” she said.

East Grampians Health Service acting chief executive Andrew Freeman said the announcement was fantastic news.

“It will increase our capability to do more surgical work for the community,” he said.

East Grampians Health Service has two operating theatres. 

Mr Freeman said the upgrades would complement current services and support Ballarat Health Service.

“The upgrade will mean on a day when we have one theatre running, if there is a need for (emergency surgery), we are not juggling things around. This will absolutely increase our capability,” he said.

The project is in the concept stage. The project will start next year and Ms Hennessy said she hoped it would finish by 2020.