In an unusual move, the Napthine government will buy back the state's only privately owned and run hospital following a community campaign to return the health service to public hands.
The government will regain ownership of Mildura Base Hospital in 2015 after reaching an agreement with its owners and operators.
But community group Reclaim Mildura Base Hospital - which has spearheaded a campaign to return the hospital to public hands - is not claiming victory, and has vowed to continue fighting until the hospital's administration is returned to the state.
''We will be the only public hospital in Victoria managed by a for-profit company,'' the group's Jo Clutterbuck said. ''We are pleased the government has taken the first step to purchase the building, but we will still keep campaigning for public management. We will not settle for anything less.''
She said under private management there was no transparency and staff received inferior salary packages, which affected the hospital's ability to attract and retain staff.
The hospital was privatised in 2000 and is owned by a superannuation fund. It is operated privately by Ramsay Health Care, which will continue running the hospital until at least 2020.
Meanwhile, the Queensland government has announced it will outsource the running of the new $1.8 billion Sunshine Coast University Hospital in what looks to be the biggest hospital privatisation in Australian history.