The aged care facility will be built on a 9.6-hectare block of land bordered by Cobra Street and Sheraton Road, and when the first stage is completed, will be a 70-bed, aged-care facility.

The facility then hopes to be expanded by a further 75 beds after 2017, taking the total to 145 beds, with a wide range of care levels, including self-care units.

The Royal Freemasons' Benevolent Institution of Australia chief executive officer Alex Shaw is adamant the facility will offer a high quality service for people in and around Dubbo.

"We are really happy with the site and the facility will be first class," he said.

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"It offers a really good function for people living there as its only about a kilometre to the Orana Mall and it is on two main roads.

"It will be a five-star facility and we can't wait for building to begin."

Mr Shaw believes the facility will cost a total of $20 million from start to finish, and will employ at least 100 people such as registered nurses, cooks, cleaners and carers.

Dubbo Terrazzo and Concrete Industries owner Nino Patriarca, who has run the business since 1972 when he and his brother bought it, was ecstatic to get the contract.

"We will be starting straight away and hope to be finished by the end of 2016," he said.

"In peak times there could be around 50 workers on site and we will be using as many locals as possible.

"It's great to get the contract and we enjoy projects that add to the community and this is something that is needed here."

The Freemasons' Institution also has a 45-unit self-care facility in White Street, which it has been running since 1982.