Cancer patients in the Australian Capital Territory and surrounding regions of New South Wales are set to benefit further from national health reforms, as construction begins on the $44.6 million Capital Region Cancer Centre.

The new Centre will comprise over 5,000 square metres of floor space across five levels to expand services currently provided at the Canberra Hospital, including ambulatory, medical oncology, cancer psychosocial, rehabilitation, clinical haematology and immunology as well as teaching and research facilities.

The total value of the Capital Region Cancer Centre is $44.6 million, with the Gillard Government contributing $27.9 million and the ACT Government contributing $16.7 million. The Gillard Government has also provided a further $1.8 million to the ACT to provide specialist accommodation in the Canberra suburb of Duffy for patients using the Cancer Centre.

Turning the first sod on the Cancer Centre project today, Minister for Health and Ageing NicolaRoxon and ACT Chief Minister Katy Gallagher said the Centre was another example of the Australian and ACT Governments working together to deliver better health services where they are needed most.

"Reducing people's chance of getting cancer, and treating it earlier and more effectively, are key priorities for the Gillard Government through national health reform," Minister Roxon said.

"When the Capital Region Cancer Centre opens, it will service around half a million people across the ACT and surrounding regions of New South Wales.

"This Centre means that more working families in the ACT and surrounding regions will have access to world-class, comprehensive screening, assessment, diagnostic, treatment and palliative care services."

ACT Chief Minister Katy Gallagher said the new Centre shows what can be achieved for the Canberra community when both governments work together.

"The ACT Government is grateful for the Federal Government's support which complements the work we are doing to rebuild our health and hospital system," the Chief Minister said.

"The ACT Government is investing more than a billion dollars in health infrastructure to prepare for the future health needs of this city and cope with ever increasing demands for care. Cancer is one of these areas that will need to grow each year.

"When completed in late 2013, the new cancer centre will improve cancer treatment in the ACT by drawing together and integrating cancer services including chemotherapy, radiation therapy, haematology, immunology, and research and teaching programs within a single five-storey building on the Canberra Hospital campus," the Chief Minister said.

The Capital Region Cancer Centre was one component of a $560million program to improve access to cancer services and support in regional areas of Australia, and is part of a $2 billion Australian Government initiative to build a world-class cancer care system.