A new level four health facility will be built on the site in south-east Moruya. Construction is expected to begin in 2022, with the hospital opening to patients in 2025.

"We will be delivering so much more than is currently in the district including a new MRI, an eight-bed intensive care unit and enhanced oncology services," said NSW Health Minister Brad Hazzard.

This facility will provide 17 new Emergency Department beds and space for staff training and education with the latest medical technology.

"It doesn't matter whether you live in Narooma, Moruya or Batemans Bay, you will have outstanding medical care as close to where you live as possible," Hazzard said.

Once completed, the facility will provide more than the combined 86 beds at the existing Moruya and Batemans Bay hospitals.

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The new facility is going to "completely change how healthcare is delivered into the future" according to State Member for Bega Andrew Constance. He said the centrality of the selected site made the hospital the "perfect location" to provide world-class healthcare to the region.

"Our existing hospital just aren't meeting our needs," Mr Constance said. "We need our nurses and doctors to have the latest workplaces available for them. That's currently not the case."

"I had a situation where I was airlifted to Canberra recently, and it's a real challenge. Anything that can be undertaken to provide more services locally to stop the upheaval associated with travel is great for the community."

Mr Constance said a new facility was necessary for the region because there was no opportunity to expand the existing Moruya or Batemans Bay hospitals.

"They are both landlocked," he said. "This new facility has space to expand into the future when new stages are needed for the hospital."

The existing Batemans Bay facility is a level two hospital, while Moruya is currently level three. The new facility will be level four, meaning medical staff are on site 24 hours a day, seven days a week.

There will be an intensive care unit, specialist diagnostic services and a commitment to research and education through a training program in affiliation with a university or education facility.

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Mr Constance witnessed first-hand the influence of medical staff being equipped with the best available resources when the Bega Regional Hospital was opened in 2016.

"I saw a change in the confidence of staff when the [Bega] facility was opened," he said. "It had such a positive impact on the community."

The new facility will also have a separate door into the maternity ward allowing opportunities for Indigenous connection to country to happen after birth.

"This facility is something our community can rally behind," Mr Constance said. "It will transform healthcare for the future."

Mr Constance is excited by the work opportunities the project will provide to the region.

"This project will support hundreds of direct and indirect jobs here in the region during construction," he said. "Once it is built there'll be additional jobs working at the hospital."

The Bega facility created 350 jobs during construction, and Constance predicts the Moruya facility could exceed this number, creating as many as 500 new jobs in the area.

The facility also creates jobs upon completion, attracting new medical specialists to the region.

"It will be up to the Local Health District to recruit all of the specialist clinicians necessary," Mr Hazzard said.

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Many new workers relocating to the area could increase pressure on Eurobodalla's already stretched housing market.

"We are still recovering from the loss of over 500 homes during the fires," Mr Constance said. "We have three years to see more affordable housing created in the area [before the opening of the hospital}."

Mr Constance said it was essential proper carer's accommodation was provided in the region, and local government working with the state and federal government provided the best answers to this issue.

The government has not disclosed their plans for the existing hospitals in Batemans Bay and Moruya. Mr Constance would like the sites utilised as medical training facilities as with the old Bega hospital - which was transformed into a $25 million TAFE facility.

The site acquisition process is proceeding for building to commence in 2022.

The project is included in the NSW Government's recent announcement to boost investment in rural and health services by $500 million.

The NSW Premier today announced Nationals Deputy Leader Bronnie Taylor as the new cabinet minister for the newly established ministry of regional health in an increased focus on rural health services.