The Government has committed $20 million towards a new health centre in the South Island town of Westport.
This comes just days after the Opposition accused the Government of "marginalising rural New Zealand" after it scrapped plans for a School of Rural Medicine in the Waikato.
Health Minister David Clark said the funding had been made available for the new Buller Health Centre in Westport.
"The people of Buller have waited long enough for a modern, purpose-designed health facility," he said.
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The new facility would be located on the current hospital site and the scope of the project would be increased to allow for the inclusion of the locally provided Adult Dental Service as well as two additional medical beds.
The funding comes as part of the Government's $750m health spending boost in Budget 2018, which was allocated to "tackle some of the most urgent building problems facing hospitals around the country".
West Coast Tasman MP, Labour's Damien O'Connor, thanked the Health Minister for listening to feedback and boosting the number of medical beds beyond the initial plan.
"Many people should be proud of their efforts to get a better deal for Buller residents after the previous Government's determination to penny pinch and entirely ignore the community's wishes.
"The new facility will be one that the community can be proud of and I'll be keen to see construction get under way as soon as possible."
Of the $750m earmarked in the Budget for new health spending, $579.7m – or 77 per cent – has been allocated.
The big ticket items included $275m for Auckland DHB to address significant infrastructure challenges at Auckland City Hospital and Greenlane Clinical Centre.
Some $200m for a new elective surgery unit at Waitematā's North Shore Hospital was also allocated earlier this year.