The funding was announced by Industry, Innovation and Science Minister Greg Hunt on Thursday as part of a Coalition $90 million package to assist next generation manufacturers.

In a double boost for Wodonga, Wilson Transformers will receive $1 million from the same funding round to help establish a facility to produce small transformers from its Moloney Drive headquarters.

XLam, which manufactures cross laminated timber for use in the construction industry, announced in May it would be establishing an Australian base in Albury-Wodonga.

The New Zealand-based company has not officially announced where the factory would be built, but The Border Mail understands XLam is setting up at Logic.

Work on the factory is expected to start this month with Joss Construction to build the $18 million facility which will create 30 direct and 24 indirect jobs when completed.

A company spokesman didn't respond to The Border Mail.

Wilson Transformers will create 15 new jobs and safeguard others with its investment in a dedicated manufacturing line to efficiently produce small transformers.

General manager Jon Retford said equipment had been ordered from overseas, for the new line of work, and was due to arrive before Christmas.

Wilson Transformers also secured $400,000 in Victorian government funding earlier this year.

"Clearly the state and federal governments have recognised the worth of this project,” Mr Retford said.

"It will open up new markets for us and is pretty exciting actually.

"It will be in the small range of transformers which we haven't made really well up until now.

"But this will make us really competitive."

It is expected to be fully operational in the first half of next year.

The total project cost is $3.39 million.