On Thursday it was announced $1 million from the state government's drought stimulus package would help pay for essential infrastructure required to establish an over 55 retirement village in Narromine.

The funding would help deliver vital utilities, including water, power and sewage, to enable 45 low-care properties that would be operated by aged care provider Timbrebongie House.

Chairperson of the Timbrebongie House committee Trevor Roberts said the committee were "wrapped" with the announcement.

"We've been working on the project for a decade now looking at different blocks around town and eventually settled on this one, but lacked some finance to get it going," he said.

"Dubbo MP Dugald Saunders always said to us over the last couple of years, 'stick with me it will happen.'

"We stuck with him and it happened."

Mr Roberts said 37 per cent of Narromine's population are 55 years and over, and that the project would not only benefit people in the shire, but the entire western region.

"This is going to be very important for our community in the next 15-20 years and continue to flow on really from there," he said.

"[Hopefully now] we can have an excellent retirement village for the people of Narromine and hopefully the people of the west would feel comfortable here, so it's a great day for us."

Work on the vital connections for the project is expected to commence in 2020 with up to an additional $4.2 million in co-contributors provided by the Narromine Shire Council and the Timbrebongie House committee.

"We're absolutely thrilled with the potential of this development now," Narromine Shire Council mayor Craig Davies said.

"This has unleashed $24 million worth of councils capital expenditure, at a time when we're suffering the effects of this very lousy drought we've got at the moment.

Councillor Davies said the project was a win for the shire, and would help create local jobs.

"This is the sort of development that keeps our tradies in work, many of our townspeople in work and so it's a wonderful development for the future of our shire," he said.

The mayor praised Member for Dubbo Dugald Saunders' work and support of the project.

"I need to thank Dugald very much for the effort that he's put in here," councillor Davies said.

"This is really a federal matter, but Dugald has seen the vision we have out here, he's seen the need for the aged care and so he's come on board and through his hard work we've got $1 million that's going to kick start this, it's a wonderful result."

Mr Saunders said this funding was a great way the state government could help make a reality of something that's been pushed for the community for quite some time.

"The councils been very proactive on this project, mayor Craig Davies has certainly been pushing this for quite some time, I in turn have been pushing this project for Craig and for council and I'm really happy we've got the result today to kick things off," he said.