NSW Health Minister Jillian Skinner said a new health service for Pottsville would improve health outcomes for residents.
After eight years of political wrangling the project was given $1.4 million in the NSW budget announced on Tuesday.
Late last year the project was given more than $400,000 because delays caused a budget shortfall.
"HealthOne NSW is an integrated primary and community health initiative from the NSW Government, bringing together GPs, community health and other health professionals in multidisciplinary teams," Ms Skinner said.
"HealthOne Pottsville is expected to improve health outcomes for the local community by improving access to primary health care services and management of chronic disease for the elderly is a priority."
The service will be located in Elizabeth St adjacent to the Pottsville Beach Neighbourhood Centre.
HealthOne Pottsville will also provide the community with health promotion activities and healthy lifestyle programs targeting prevention of chronic diseases such as diabetes and cardiovascular, cancer and respiratory disease.
Ms Skinner said the Pottsville Medical Centre was a committed partner of HealthOne Pottsville.
The funding was a win for the region in the face of a tough 2012/13 NSW Budget that included job losses in the health sector.
"The Labour Expense Cap excludes nurses, police and teachers," Ms Skinner said.
"Agencies will have flexibility to develop workforce efficiency and productivity strategies to achieve the Labour Expense Cap.
"In health, Local Health districts will determine how best to achieve this."