German Pharmaceutical company Fresenius Kabi Australia will build a $47 million manufacturing plant at Derrimut in Melbourne's west.
The ABC reports that the factory is set to be completed in 2015 and will be operational by 2016. It will employ 120 people in high end manufacturing jobs.
As AAP reports, Fresenius Kabi Australia received government assistance, in the form of Victoria's Technology Plan for the Future – Biotechnology, to help with the project.
When completed, the plant will make intravenous therapy bags and other medical products for use in surgery, emergency departments and intensive care. It will be able to operate 24 hours a day to meet hospital demand.
According to Victorian Premier Denis Napthine, the announcement reflects the strong future of the biotechnology sector.
"This state has continued to invest in technology, invest in biotechnology, and grow real jobs, positive jobs growth in that area in to the future," he said.