Illawarra Shoalhaven Local Health District board chairman Professor Denis King said the planned "hub and spoke model" for the region was taking shape thanks to continued investment in health infrastructure.

In the next financial year, Bulli Hospital's transformation into an Aged Care Centre of Excellence will begin, thanks to a $14.7 million boost from the state budget.

The project, to cost a total of $34 million, will include a primary healthcare centre and 60 aged-care beds and is expected to be shovel-ready by early 2016.

A further $8.2 million was allocated in the budget to complete Wollongong Hospital's $107 million Elective Surgery Unit and its $31 million multistorey car park.

Meantime, $2.9 million in 2015-16 will enable planning to start on the $251 million redevelopment of Shellharbour and the $8 million car park at Shoalhaven Hospital.

"We're delighted that all of the undertakings we were given about the development of the services in the Illawarra and Shoalhaven have been delivered as promised," Dr King said.

"It fits in with the overall plan of developing Wollongong, Shellharbour and Shoalhaven hospitals as the three hubs for healthcare in the region.

"Planning can now start at Shellharbour Hospital, where a major redevelopment is needed to cater for the growth in that area.

"Wollongong Hospital's redevelopment will be completed, and it's really state-of-the-art in terms of the provision of ward space, theatre capacity and intensive care facilities.

"And the significant expansion at Bulli Hospital - which has been a political football for 25 years - will do a great deal for aged and community care in the region."

The bulk of the 2015-16 funding for Bulli Hospital's upgrade - $13.7 million - comes from the Restart Illawarra Infrastructure Fund, with the remaining $1 million from NSW Health funds.

However, Keira MP Ryan Park said it was too little, too late.

"I'm very pleased that finally after many years we're seeing some funding allocated to Bulli Hospital," he said.

"However, this project was announced 18 months ago as part of the infrastructure fund and we would have liked to see more funds allocated earlier; not only to enhance the hospital but to support the regional economy and tradespeople facing tough economic conditions."

The hospital funds formed part of the budget's $1.4 billion in capital works funding, which was on top of a $19.6 billion spend on health.

The health funding included $1.7 billion for mental health services - with investment in programs including the Illawarra Health and Medical Research's ProjectAIR strategy for personality disorders.

Nearly $2 million will also be spent this financial year to expand the Stimulant Treatment Program to the Illawarra Shoalhaven, northern NSW and western Sydney for people who use methamphetamines including ice.

Meanwhile, children throughout the region should be able to undergo a range of routine surgical procedures closer to home with the funding of five additional paediatric general surgeons who will work in a hub-and-spoke model from Sydney.

And Berry is one of four rural towns to share in $14.4 million to build new ambulance stations.