Stage two of works to a rural health centre will include an additional eight-bed capacity and an additional consultation room.
The state and federal governments announced the next stage of construction on the Midlands Multi-Purpose Health Centre in Oatlands will begin the week of February 24.
It follows stage one upgrades completed in late 2024, which delivered a contemporary aged care residential wing with eight bedrooms.
Sub-acute, aged care and community services nursing director Ann Allanby said the facility enabled people to to access services and not have to leave the area.
"It enables people to actually remain in the community," Ms Allanby said.
"We've got sub-acute beds, we've got residential aged care beds, and we've got an emergency care centre which is managed 24/7.
"We've also got very good support from the GPs within the centre."
Tasmanian company Macquarie Builders is responsible for the redevelopment, which is expected to take approximately nine months.
Stage two concerns the complete refurbishment of the Callington Wing.
The works will include an additional eight-bed capacity aged care centre, with ensuites, a private entrance to the Oatlands doctors' surgery, an additional consultation room, storage facilities, and an administration area separate from the main hospital entrance.
The federal government committed $3.87 million to the upgrades, through the Disability and Ageing Aged Care Capital Assistance Program.
Federal Assistant Health Minister Rebecca White said the project was a result of 35 years of community support.
"For more than 35 years, they've worked really well with the government, and the community more broadly, to raise funds to see the development of the projects as you see them today and also what they envision for the future," Ms White said.
"Raising over $2 million from the local community over that time to support projects that have supported people (to) access health services close to where they live."
State Health Minister Bridget Archer said access to services in local communities was a key part of supporting Tasmanians "get the right care, in the right place, at the right time".
"Stage 2 works will build on the first stage of the redevelopment which opened in late 2024 delivering a contemporary aged care residential wing with eight bedrooms, supported by a $3.5 million investment from the Tasmanian government," she said.