The upgrade will include the construction of a brand-new main building to the west of the site, which will also have the capacity for home aged care residents whose current facility is no longer fit for purpose.

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Mr Guy announced the funding was a key part of the Liberals and Nationals' plan to fix Victoria's healthcare crisis.

"For too long, the St Arnaud community has been forced to settle for substandard facilities, but a government I lead will change that, " he said.

"This commitment is an important part of our plan to fix Victoria's healthcare crisis and will help give St Arnaud the quality local health services they deserve."

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Member for Ripon Louise Staley said the vital upgrade would mean better healthcare for St Arnaud and surrounding communities.

"This is a game changer for the hundreds of locals calling out for better facilities at the hospital for years," she said.

East Wimmera Health Service chief executive Trevor Adem thanked the opposition for the commitment.

"This health service is one of the oldest in the state and St Arnaud's building is difficult to maintain and not necessarily fit for purpose," he said.

"We appreciate the opposition's funding commitment that will allow us to undertake a project that is important to the community."

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