The NSW government has committed to funding a redeveloped mental health facility on Friday with the final price tag subject to final designs being ticked off after consultation with patients, carers and staff and ensuring requirements highlighted in the Royal Commission into mental health are met.

Albury Wodonga Health deputy chief executive Janet Chapman confirmed Nolan House would remain on the existing site with an increase in beds from 24 to 32, but acknowledged it was becoming cramped.

Nolan House is being factored into master-planning work for the entire hospital site due for completion in September.

"We know there is a location that will work, we know there is a design that will work," she said.

"But we haven't done that in partnership with the users.

"We need to go back and check all those things.

"The master-plan will take a look at the whole picture.

"We've got quite a big parcel of land, but we would need to go up if we were going to get much bigger."

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Funding for Nolan House will come from a $700 million NSW mental health infrastructure program with minister Bronnie Taylor in talks with the Victorian government about providing some funding.

"This will now provide an opportunity for Albury and surrounding region to have world-class mental health care here," the former cancer nurse turned MP said.

"It will allow people to have this incredible web of support around them."

Friends of Nolan House's Les Schmutter welcomed the NSW funding.

"Some might say a little overdue, but I think we can all be very happy with the prospects of the future," he said.

"Not all facets of mental health have been accommodated (here) as well as they could be.

"It's been a challenge with the needs in this area. Bigger and better facilities should accommodate those."

Member for Albury Justin Clancy acknowledged staff frustrations with the existing facility.

"Over the years they have spoken to us about how the physical design of the existing building limits capacity for contemporary models of care," he said.

He also touched on the progress of the master-plan work which is also being bankrolled by the NSW government.

"We would like to see that master-plan complete and the guidelines we've been given is that should be around September," he said.

"We understand that is a tight timeframe."

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