It comes as 18 residents at Terang's May Noonan Centre recorded positive COVID-19 cases during the past week.

In a statement, Lyndoch Living said all affected residents had anti-viral medication, were up-to-date with COVID-19 vaccines and were displaying minor symptoms.

It said the outbreak was isolated to the May Noonan Centre with the isolation period set to end on Wednesday, August 24.

Lyndoch Living said the Aged Care Quality and Safety Commission had issued a Notice to Agree regarding non-compliance with its responsibilities under the Aged Care Act.

The board and senior management of Lyndoch Living agreed to the notice and was working to rectify all concerns identified by the commission, including appointing a clinical adviser by 5pm Monday to provide advice and support.

A Notice to Agree sets out actions a provider is required to do (including necessary timeframes). Should a provider fail to agree, their approval to provide Australian Government subsidised aged care may be revoked. Once a provider has agreed to a Notice to Agree, it is required to do the actions it has agreed to. If it doesn't it may be sanctioned.

The My Aged Care website showed the reason for the sanction was due to the Aged Care Quality and Safety Commission identifying there "was an immediate and severe risk to the safety, health or well-being of care" of residents.

In order to avoid the imposition of a revocation sanction Lyndoch must appoint, at its expense, an eligible adviser to assist it to comply with its responsibilities for a period of at least four months from ceasing on December 20.

It must give the eligible advisor all the necessary information required to provide their assistance, immediately implement and comply with all advice, recommendations and directions of Commonwealth and Victorian health authorities, provide, at its expense, training for its officers, employees and agents as specified and to demonstrate it had provided that training.

Board chair Susan Cassidy said any notification from the commission was deeply concerning and Lyndoch Living had appointed a clinical adviser as required while working closely with health networks to meet compliance standards.

"The health and care of our residents is our number one priority, and we are working closely with the Public Health Unit to ensure we continue to deliver high-quality care while protecting our team and other residents," she said.

"We are grateful for the clinical leadership and support provided by South West Healthcare and Terang & Mortlake Health Service, which have provided staffing resources and support to address the ongoing challenges we face.

"We are also grateful to the commonwealth and state governments, who have provided a surge workforce to assist our team.

"While we continue to liaise with primary contacts of the affected residents I want to reassure our community that all affected residents are healthy and doing well, and as always, we remain focused on providing quality care to our residents and supporting our dedicated staff."

The statement said from the 17 non-compliance requirements under the eight standards originally flagged as areas of concern by the commission, Lyndoch Living had resolved all but two requirements.

It said it was working closely with experts and the commission to ensure it was compliant as quickly as possible.

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