Premier Daniel Andrews said, if re-elected in November, the new 504-bed Footscray Hospital could allow an extra 15,000 patients to be treated each year,.

It would also see an additional 20,000 emergency department admissions.

The new hospital will replace the current tired and ageing facility that was built in the 1950s.

Mr Andrews announced the preferred site for the new hospital, to be built at Victoria University's four-hectare Footscray Park campus, on the corner of Geelong and Ballarat Road on Sunday.

The bigger facility could see up to 17,000 western suburbs residents redirected from inner-city hospitals back to their local area, which Mr Andrews said would take pressure off other hospitals.

If Labor stays in government, construction will begin in 2020 and it will open in 2025.

Australian Medical Association president Julian Rait applauded the announcement and called on the opposition to match the commitment.

"The redevelopment of Footscray Hospital must be a priority," Associate Professor Rait said.

The current hospital, located in Gordon Street, has almost 300 beds and will remain in operation until the new facility opens in 2025.

Opposition Leader Matthew Guy questioned why it had taken four years in government and an election for Labor to announce a new hospital if the existing facility was so bad.

"If that hospital is in such a dire need of an update as we are told now today ... then why hasn't it been done over the last four years?" Mr Guy asked, saying he'd look at the commitment.

Australian Associated Press