Macedon Ranges councillors are due to vote on Wednesday night on plans to build a childcare centre on land next to the historic building.

The shire has also confirmed it has received an application for a co-located aged care facility at the Simpson Street site.

Plans for the child and aged care facilities were first unveiled back in 2019 when Embracia Victoria announced it had bought the site for a reported $4.95 million.

The previous owner had proposed turning the heritage-listed structure into apartments while also building townhouses on the remainder of the site.

But the plan generated a big community protest, with the former SBS newsreader Lee Lin Chin drafted in during 2016 to be the public face for the Save the Old Kyneton Hospital campaign.

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The building itself dates back to 1857, when construction started, and it is one of the oldest hospital buildings that remains intact in country Victoria.

The childcare centre plan going before Macedon Ranges councillors for a vote on Wednesday night represents the first stage of the site's proposed overhaul.

Councillors are told the new, double-storey facility would be built in the north-eastern corner of the site and provide places for up to 120 children.

"The building would include five childcare rooms, an infant care room, and a central area of the building containing the reception area, kitchen, and staff/meeting room at the upper floor area, with the lower floor area providing for services including water tanks, maintenance/store rooms and bin storage," shire staff said.

Five objections were lodged when the plans were put out for public comment. Opponents of the proposal were worried about noise, increased traffic and the building's appearance.

But shire staff have recommended councillors approve the plans.

Councillors are also told the developer recently lodged a separate application for the aged care portion of the project, including a cafe.

This application would need to go though a separate referral process, shire staff said.

At the time of the purchase, Embracia Victoria said it would "engage heritage architects, cultural heritage consultants, and other experts to oversee a faithful restoration, ensuring the preservation of the unique social, architectural and historical importance of the Old Kyneton Hospital."

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