The announcement ahead of the May 20 budget was made by Northern Victoria MP Jaclyn Symes on Friday.

Indigo North Health, which operates an aged care facility called Glenview, will use the funding to build on land the service already owns.

"This will be a 50-bed facility for aged care which will include individual ensuites, which is what modern aged care facilities should have, and Rutherglen currently does not," she said.

"They are awesome staff and an awesome community, but facilities are very tired and lacking.

"This will be a brand new greenfield construction, so they won't have any issues with decanting or living through construction."

Ms Symes said Indigo North Health chief executive Shane Kirk had been in his role for the duration of her time in Parliament and had made clear the need for upgrades.

"We had some success with the Regional Health Infrastructure Fund patching up both Chiltern and Rutherglen sites, but we needed to do something really serious for Rutherglen," she said.

"I'm very proud to deliver this and the board and Shane Kirk have been strong advocates."

The facility will be built on a 4.5 acre block of land already owned by Indigo North Health, which used to belong to the Drennan family, on the Chiltern-Rutherglen Road.

It will increase by 10 beds what is currently available at Glenview, which has 40 approved beds, of which 30 are designated for high care.

Mr Kirk said the block was bought some years ago with the intent of one day constructing a new aged care facility.

"We've been chipping away at this for quite a few years - certainly, we've been working with the Victorian Department of Health in earnest for the last 12 months to develop a business case for the construction of the facility," he said.

"We currently have 18 people on our waiting list, so this will help address need."

Mr Kirk said the original building was built in 1938 and added to over time, and it no longer fit the purpose of aged care but might be of use to other health programs.

"We still have a scenario at the moment where people have to share rooms and share bathrooms ... that is not up to standard, particularly following the Aged Care Royal Commission," he said.

"Jaclyn has been a continual supporter of the organisation ... the government has given us grants for various bits of redevelopment, but we needed something else."

Detailed planning will now progress with the intention of starting construction in the 2021-2022 financial year.

The news was welcomed by former Nationals MP Ken Jasper, whose wife Annette spent 12 months at Glenview before passing away two years ago.

"The service provided by Glenview and by the staff has been absolutely amazing, but the facilities were and are substandard," he said.

"They don't meet the requirements of a modern nursing home.

"When my wife was in the facility, there were three sharing a bathroom.

"$57 million is a massive amount of money which will absolutely provide for the full facility to be done properly."

Mr Jasper said what began as a bush nursing hospital had added on many facilities.

"It has come a long way in providing a great range of services," he said.

"It's been a number of years that this has been happening (pushing for upgrades), but particularly in the last couple of years we've put more pressure on."

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The funding forms part of a new fund under the portfolio of Minister for Disability, Ageing and Carers Luke Donnellan.

"Rutherglen was first in line ... they've got the unfortunate title of being most in need in country Victoria," Ms Symes said.

On calls for a greater Victorian contribution to Albury Wodonga Health's emergency department, Ms Symes said she would "never rule out funding".

"This funding is a dedicated new strategy for funding aged care ... it is a separate bucket to general health and hospital funding," she said.

"My announcement today is in relation to Rutherglen ... (but) there is a lot of investment going into health services in North East Victoria."