Initial works on the 'cottage-style' facility will begin in mid-September with the project set to be completed by June next year.

HammondCare Chief Executive Mike Baird said he was delighted the company was able to continue its investment in caring for vulnerable older residents in the Scone region.

"HammondCare has been a leading provider of dementia care for more than 25 years and the new cottage-style home in Scone will benefit from this experience as it provides an enabling, therapeutic environment for people with dementia," Mr Baird said.

The care home will incorporate dementia-specific design features including single rooms with ensuites, a domestic kitchen and access to outdoor garden spaces for residents.

The new development will also include a new commercial laundry, an expanded administration area and the first stage of a new community centre for HammondGrove independent living residents across Scone.

HammondCare also announced plans to retire its 1980s Strathearn Village care home on Stafford St as part of the project, with current residents to be moved to either Strathearn House or the new facility depending on their care needs.

Mr Baird said consultations have already begun with residents, staff and other stakeholders at Strathearn Village to ensure a well-managed and safe transition over the next 12 months.

"Our top priority is the care of residents and we believe Stafford St residents will be delighted with their new accommodation on Gundy Rd which will provide improved facilities with the same excellent level of care they are accustomed to," Mr Baird said.

Mr Baird said there would be no job losses associated with the transition and managers will carefully consult with the HammondCare team regarding their future employment arrangements at the Gundy Rd site.

In a statement, HammondCare said the project would help ensure the long-term viability of aged care in Scone by allowing it to consolidate its residential care services on its own land at Gundy Rd site, with the company's current lease agreement with Hunter New England Local Health for the Stafford St site set to expire within five years.