Minister of Health Chris Hipkins has this morning announced $262 million will be spent on replacing 50-year-old infrastructure at Auckland City Hospital.

It's part of the Government's $3.5 billion investment package to improve our hospitals and health infrastructure across New Zealand.

Hipkins visited the Auckland City Hospital today to confirm the release of the funding for the second stage of core infrastructure works - which he says will employ as many as 350 workers on site.

"It's crucial DHBs have reliable and resilient infrastructure to support the delivery of high-quality services to improve the health and wellbeing of New Zealanders," he said.

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"After a long period of underfunding, this government is tackling the long-term challenge of bringing our hospitals back up to the standard New Zealanders expect."

Hipkins said the project sent another strong signal to the construction sector that the Government has a rolling maul of major construction work to provide confidence and support to businesses and workers.

"At its peak, the work we are funding today will employ as many as 350 workers on site. I'm pleased that initial work such as site investigations, surveys and testing is already underway, with physical work due to begin in October."

Hipkins said most of the infrastructure at Auckland City Hospital was almost 50 years old and the majority of the site relies on services from the central plant building.

"Any infrastructure failure could compromise the entire hospital. Reliable infrastructure improves safety for patients and staff. It ensures better responsiveness and fewer operational issues. The DHB will also be better positioned for future capacity works to meet growing demand."

The minister said the hospital would get a new central plant and service tunnel, and new tanks, pumps and air-handling systems.

"This significant investment will make a real difference. While often behind the scenes, away from patients and whānau, it's the critical infrastructure that keeps hospitals running. This work will get underway while the DHB's existing infrastructure projects are progressing."

Hipkins said improving infrastructure in DHBs was a priority for the Government.

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"A recent report on the current state assessment of their assets highlights a number of issues with core infrastructure across the country," he said.

"The Ministry's Health Infrastructure Unit is leading a work programme to improve infrastructure delivery and asset management, including a national framework with service design standards, maintenance and renewal strategies, planning guidance and more focus on equity and sustainability.

Hipkins said Budget 2018 allocated $275m for the DHB to begin upgrading key infrastructure, including lifts, fire protection systems, boilers, electrical substations and water systems.

"This work is progressing well.

"Today's funding, from Budget 2019, brings investment in core Auckland DHB assets to more than half a billion dollars in two years, as this government makes up for a decade of neglect under National," Hipkins said.