A community consultation committee will be set up as the first step towards a new Gunnedah hospital, after the $53 million project was listed in this week's state budget papers as set "to commence prior to March 2023".
A spokesperson for Tamworth MP Kevin Anderson's office said local health groups would be included, it would be "an open and transparent process and it will work well for the upgrade for the hospital".
They said Mr Anderson was "planning on having an initial meeting [with Hunter New England Local Health District (HNELHD) chief executive Michael DiRienzo] in the next two to three weeks" to start this process.
HNELHD infrastructure and planning executive director, Ramsey Awad, said HNELHD would "commence a planning process in the coming months as the first stage of planning for the redeveloped hospital".
"This initial planning process will determine the future health requirements for the local community," Mr Awad said.
NSW Nurses and Midwives Association (NSWNMA) delegate Heather Franke said she was "very, very excited" about the funding.
However, she said, "if it hadn't been for Jeff Bacon of the Shooters, Fishers and Farmers Party getting it started, it wouldn't have happened".
"[The NSWNMA and I are] very, very excited and pleased Mr Anderson has come through with his commitment and promise, so now we'll just wait and see," Mrs Franke said.
"It was good that we had Jeff Bacon ... start the petition and process, so that we were heard and it was picked up by the Nationals party member - and it shows that good, healthy competition between election parties works."
Mrs Franke, Mr Bacon and the NSWNMA had also been campaigning for better nurse-to-patient ratios; however, funds to make this happen were not part of the budget.
"It's disappointing that the nurses didn't win their battle to have nurse-to-patient ratios established," Mr Bacon said.