The state government yesterday announced Western Health would operate a new hospital in Toolern, near Melton, that will offer 24 hour and specialist care.

BHS is the principal referral hospital for the entire region from Bacchus March to the South Australian border, but a tertiary hospital in Melton is likely to cater for patients from Bacchus Marsh, Ballan and other parts of Moorabool, easing pressure on Ballarat's hospital.

Construction of a new hospital could also help ease surgery and specialist appointment waiting lists not only in Ballarat but across the west of Melbourne as the population across the region continues to grow.

With a population of more than 140,000 people, Melton is forecast to grow to more than 243,000 residents by 2031 - with Ballarat's population booming to more than 128,000 by the same date.

The proposed 24-hour hospital's location, size and range of services is still being worked out, but the state government says a tender has gone out to a shortlist of six consultants.

"As one of the fastest-growing communities in Australia, Melton locals deserve a world-class, 24-hour public hospital, right on their doorstep," acting health minister Martin Foley said.

The government has already committed $2.4 million for a business plan for the new hospital.

Initial planning is underway and master planning will follow when a principal consultant is appointed early next year. The initial planning will involve a detailed investigation into the health needs of the Melton region, now and into the future, and will set the groundwork for designing a hospital that will meet growing demand for many years to come.

The planning works will also look at how the new Melton hospital will link in to services in other public hospitals in the western region, including the new Footscray Hospital and the new Joan Kirner Women's and Children's Hospital.

"Melton's new hospital will be in trusted hands. Western Health has a proud track record providing the highest quality care to patients throughout Melbourne's booming western suburbs," Mr Foley said.

Western Health operates throughout Moorabool as well as Brimbank, Hobsons Bay, Maribyrnong, Melton, Moonee Valley, Hume and Wyndham.

There has been increasing pressure on the government to fund a public hospital in Melton, particularly after an inquiry in to the potentially preventable deaths of 11 babies at Djerriwarrh Health Services' Bacchus Marsh hospital.

YOU MIGHT LIKE: Firefighters respond to five car fires in past 24 hours

The announcement of Western Health as the operator of the new hospital has made it increasinly likely that Western Health and Djerriwarrh Health Service could amalgamate.

"The announcement opens the way for a wider examination of the future of healthcare needs of Melbourne's west," the two health services said in a joint statement.

"Given this major development in the two catchments, and following four years of close partnership between the services, the Western Health board and Djerriwarrh Health Service's Administrator have agreed to explore the best possible options and opportunities for healthcare in Melbourne's west.

"The exploration will include the potential benefits of an amalgamation of services, which, under the Health Services Act (1988) would need to be voluntary and agreed between boards - and benefit the community."

The announcement comes as the cash-strapped Ballan District Health and Care reviews its offerings, having recently suspended its radiology and dental services and this week announcing its spa would cease operation on December 14.

Have you signed up to The Courier's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in Ballarat.