The 500-bed facility, which could expand to 3000 beds, would be built next to the Mickleham post-entry animal quarantine centre.
The Victorian government said it’s now up to the Commonwealth as to whether the facility is built.
The decision is due to be made in September and if it receives the go ahead, the facility could be built by the end of the year.
Acting Premier James Merlino said the facility would be federally owned and built, but operated by Victoria.
“It’s about providing Victoria and our nation with options … to make our community safer,” he said on Thursday.
“Now we have a business case and preferred location, a detailed proposal has been sent through to the Commonwealth.
“The request to the Commonwealth is that they pay for the construction of this facility and ultimately take ownership of this facility.”
The state government said it would cost about $15 million to get the project ready for construction.
If construction went ahead, Merlino said the 500-bed facility would cost about $200 million.
It would cabin accommodation, to be built as an alternative to hotel quarantine in the state.
Melbourne Airport and Avalon Airport near Geelong had been other potential sites for the quarantine facility.
A purpose-built quarantine centre was proposed after February’s Holiday Inn outbreak, which sparked a five-day lockdown across Victoria.
The facility will be based on the Northern Territory’s Howard Springs facility, with guests kept in separate cabins and more fresh air than quarantine hotels.
Premier Daniel Andrews said at the time the purpose-built facility would not represent zero risk but lower risk.
“We just don’t know at this stage how this year will play out,” Merlino said on Thursday.
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