Member for Cootamundra Steph Cooke said the project will help bring comfort to people at the end of life, along with their families and carers.

"At Canowindra Soldiers Memorial Hospital the money will help refresh a patient room, lounge, kitchenette, bathroom area and outdoor space," Ms Cooke said.

"The refurbishments at the historic hospital will make sure that the building retains its heritage while still allowing a modern, comfortable facility for delivering palliative care services."

This upgrade is one of 34 palliative care facilities to be refurbished over the next two years, at a total of $5.5 million across NSW.

"This work helps create a more home-like environment and brings dignity and comfort to patients, families and carers," Ms Cooke said.

"This is wonderful for the Canowindra community, many of whom live and work in the communities of the Cootamundra electorate."

The latest round of funding follows $4.5 million allocated for refurbishments in 2019-20 and 2020-21.

Both funding rounds were a part of a $45 million enhancement for palliative care announced in the 2019-20 NSW Budget.

This enhancement and a further $56 million announced in late 2020 supports an additional 5,000 End of Life home support packages available across NSW from July 1, 2021, the recruitment of 100 new palliative care nurses, more Aboriginal Health Workers, digital health to improve access to palliative care, enhanced bereavement services and education to ensure a strong, competent workforce.

This is in addition to the $100 million palliative care package announced in the 2017-18 Budget.