Minister for Health James Merlino said Hames Sharley has been appointed to design the $10.9 million project at South West Healthcare, which will deliver an additional five acute mental health beds for the region.

"Demand for quality inpatient mental health services in our state's south-west is growing - and we're delivering to improve care, cut wait times and ensure people can get the support they need in their own community," Mr Merlino said. "We're implementing every recommendation of the Royal Commission - to fix our broken mental health system and save lives by making sure all Victorians have better access to support, closer to home."

The new unit will have a dedicated area for vulnerable groups, including women, older people and those who identify as LGBTIQ+.

Mr Merlino said Warrnambool Base Hospital was the designated mental health service provider for the region and it had been experiencing a steady increase in demand for mental health care services.

He said Victoria's south-west had the highest incidence of patients presenting with mental health concerns across the state.

Member for Western Victoria Gayle Tierney welcomed the announcement.

"This is a really important initiative for south west locals - by delivering more mental health beds, we're ensuring Victorians can get the high-quality local healthcare they need whenever they need it," she said.

Last week Member for South West Coast Roma Britnell spoke about the lack of services for people in the south-west experiencing mental health issues.

She spoke about the need for more beds, more health professionals and more funding in parliament.

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