The federal government grant was officially announced on Monday by Liberal senator Eric Abetz, Bass MHR Bridget Archer, Bass MHA Sarah Courtney, and Dorset mayor Greg Howard.

It adds to a $2 million loan to the not-for-profit from the Dorset Council, and $976,000 of internal funding, making the $5.976 million redevelopment possible.

May Shaw chief executive Julie Orr said the facility would transform aged care in the North-East.

"Importantly, older residents from across the entire North-East, from George Town to St Helens, will receive the best care and support to age well in a new facility and in the area where they live," she said.

May Shaw Health Centre, a Swansea aged care facility, took over the Aminya aged care home when its former owners, Presbyterian Care, stepped away.

There were fears when that occurred in 2015 that the facility would close entirely - leaving the North-East without a dedicated aged care home separate to the hospital.

However, the Dorset Council, state government, and May Shaw intervened, securing the Aminya facility as a second site for May Shaw.

It is now merging two aged care facilities, Aminya and the James Scott wing of the North East Soldiers' Memorial Hospital, both in Scottsdale, into the one site at Aminya.

"The 61 residents will then be supported by a single workforce operating in a single facility which means efficiencies," Ms Orr said.

"May Shaw will then be able to offer a full continuum of services from support for those living at home or with a disability; to well-being and social activities to engage and participate in and care within a contemporary living and working environment."

The residents from the James Scott wing at the hospital will move into the larger facility at the Aminya site once the redevelopment is complete.