One of 10 new Victorian community hospitals will be built in Melbourne's northeast.

The Andrews government on Saturday announced the new hospital will be built on government-owned land at Diamond Creek, 23km from the city centre.

The facility, dubbed the Eltham Area Community Hospital, will be operated by Austin Health and offer day hospital and primary care services including unplanned urgent care, day surgery and chronic disease management.

The hospital is one of 10 planned by the government in what it deems major growth areas.

Authorities say the facility's location at 405 Ryans Road will reduce the need for locals to travel to major hospitals, including Austin Hospital at Heidelberg.

"This location is a great outcome for our local community. It'll mean we'll be able to get a number of everyday health services close to home," MP for Eltham Vicki Ward said.

Once the 10 hospitals are built, it is expected they will be able to cater for at least 114,000 more urgent care patients, 55,000 dialysis treatments and 100,000 allied health sessions each year.

Designs for the Eltham hospital will be released later this year, with the project due to be completed in 2024.