Nick Sykes and his wife Danielle are refurbishing the old private hospital at 252-256 Fitzroy to establish Red Gum Childcare and Preschool.

The facility will cater for children aged six-weeks to six-years and renovations are expected to begin this month.

There are currently 867 childcare places in Dubbo and it is estimated another 50 to 80 children waiting to enrol at a centre in any year.

Mr Sykes said Red Gum would help with the growing demand.

"We have noticed that through Dubbo expanding and so many families having both parents working that demand has increased, and the location is perfect," Mr Sykes said.

He said the overall cost of the facility was still being calculated.

"We are still finalising but it will be a substantial investment and we will be making sure its of the highest quality."

When it is at full capacity Red Gum Childcare and Preschool will employ between 20 to 25 staff.

Despite the centre not being open until the middle of the year, Mr Sykes said there had already been a great response from the community.

"We only put a sign out the front of the building on Monday night and have already had significant enquiry and people sign up to the wait list."

Mr Sykes said the facility would be state-of-the-art, providing a safe, home-like environment as well as supporting the individual needs of families.

He said the centre would also follow a challenging, stimulating and educationally sound curriculum.

The Sykes have owned Peppercorn Child Care Centre for the past five years and Mr Sykes said they have more than 15 years combined experience in childcare between them.