The Victorian government on Tuesday committed funding to design work for a new Kerferd Unit at Wangaratta public hospital.

The existing 20-bed clinic is overseen by Northeast Health Wangaratta and Albury Wodonga Health and opened in 1998.

Government minister and member for Northern Victoria Jaclyn Symes travelled to Wangaratta to announce the redevelopment in front of hospital staff.

She told journalists the existing unit was "not fit for purpose" and "outdated".

"What this will do is take pressure off our EDs, we know that the experience from the staff in those centres is that more and more people are presenting with mental health issues without the options locally to provide the services required," Ms Symes said.

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However, there was no commitment to an opening date for the new unit which was part of a statewide announcement that also included new beds at Shepparton and Ballarat.

"Now that I know that people will be sitting around a table designing what this will looks like, it is something that I will advocate for sooner rather than later, but it is a commitment to deliver it and obviously the planning is the first step," Ms Symes said.

Northeast Health Wangaratta chief operating officer Robyn Gillis, who has been party to developing a business case for the project, pointed to the fresh hub emerging over a long timeframe.

"To design a facility at the quality of standard it takes time and that maybe several years away to do it properly and to build it," Ms Gillis said.

She said consideration had already been given to "tearing down" half the unit and building half a new one before completing the work.

Ms Gillis said the current Kerferd Unit, which caters to overflow from Albury's Nolan House and a catchment as far south as Mansfield, was antiquated in several facets.

"The spaces aren't open, we don't have that ability to separate the different sexes but also more importantly the new facility is going to have outdoor spaces so we're able to offer a far more positive environment for mental health care," Ms Gillis said.

She said she "absolutely" could easily fill 36 beds but stressed it was about supporting patients for a short period and getting them home with support from other services.

The government's move has been influenced by recommendations from the Victorian Royal Commission into mental health services around the need to treat people in their own environs rather than having them travel to Melbourne.

It also follows moves to refurbish Nolan House.

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