ST John of God Bendigo Hospital is gearing up for a $50-million redevelopment.
The hospital announced the project on Thursday morning.
It will deliver 72 extra beds and two extra operating theatres.
Building work will start next year when City of Greater Bendigo have approved the detailed plans.
St John of God Bendigo Hospital chief executive Darren Rogers said the redevelopment was a significant investment and would meet Bendigo's growing healthcare needs.
"It's to come in line with Bendigo's public hospital as well, because there will be new consultants coming to town and they'll want to private practice and we'll be able to support them coming in," he said.
"So it's a win-win situation."
Mr Rogers said the hospital had experienced increased demand for services in recent years.
The hospital's atrium and two extra wards were added in the hospital's last major expansion in 2000.
The north wing was renovated and an Intensive Care Unit opened in 2008.
"This new redevelopment is certainly exciting," Mr Rogers said.
"I went to Perth two weeks ago and presented to the board of St John of God Healthcare for a redevelopment which is a proposal of $50 million.
"The board have approved stage one which is $41 million which will be for a three-storey building over Lily Street which will have three floors to it.
"The top floor and the first floor will be fitted out during stage one.
"There will also be a lift from the ground floor at Lily Street going to all floors."