MELBOURNE will have a second children's hospital by 2017 - in the city's south-east.
Premier Ted Baillieu announced on Friday work would begin by 2014 on the 230-bed Monash Children's Hospital, to be built alongside the Monash Medical Centre in Clayton.
He said it would have intensive-care beds for children and newborns, dedicated cancer beds and mental health services for children and adolescents. But it will not have its own emergency department, and children will continue to be seen in an area of the general emergency department in the main hospital.
Before the 2010 election the Coalition promised $250 million for the new hospital, including $60 million in its first term and $190 million in a second term.
Last year Health Minister David Davis said the government would build the new children's hospital early in its second term, due to begin at the end of 2014 if it was re-elected.
Despite many years of lobbying for a second children's hospital, the Coalition government has provided only $15.8 million for planning and land acquisition over the past two years.
Mr Baillieu said a third of Victorian children lived in Monash's catchment area, including the booming municipalities of Casey and Cardinia.
The new hospital will treat an additional 7000 patients each year and free up capacity in the existing hospital.
A proposal for the new hospital given to the government in 2010 said Monash Medical Centre's paediatric department was fragmented, in poor condition and overcrowded with children.
The document, seen by Fairfax Media, called for additional capacity to meet present and future demand because the number of paediatric patients was forecast to grow by 17 per cent over the next 10 years from about 330,000 in 2010 to 385,000 in 2021.
It said the hospital admitted more than 27,000 children and treated 47,000 in its emergency department in 2009-10, not far short of the 34,000 admissions and 63,000 emergency cases at the Royal Children's Hospital for the same year.
Last month, the Victorian government's hospital performance report showed Southern Health had the longest elective surgery waiting list in the state. In June more than 8600 people were waiting for a procedure.