Mr Marshall said upgrades to the hospital would improve privacy and comfort for those with a life-limiting illness and their loved ones.

"Palliative care is possibly among the most important health services which can be made available for rural and regional communities," Mr Marshall said.

"It's not uncommon to hear stories about people who are born in a town like Tenterfield, live there all their life, build a family there only to have to relocate in their final months due to a lack of health services to cope with their illness.

"It's a real credit to Tenterfield that its hospital has two rooms allocated to palliative care as well as a team of dedicated nurses and health practitioners on deck to help make patients comfortable during this period.

"The refurbishment will see a new ensuite bathroom installed which will provide added privacy and dignity for patients during their stay at the hospital. Currently the two palliative rooms share a bathroom however the addition of the new ensuite will mean each room will have its own facilities."

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Mr Marshall said a sitting area utilised by visitors to the palliative rooms would also be updated, with a kitchenette soon to be added.

"Sometimes the creature comforts of being able to make your own cup of tea can make the world of difference to someone who is spending an extended period supporting a loved one by their bedside," he said.

"A new kitchenette at Tenterfield Hospital will be a hugely beneficial and I hope it goes some way to making things a little bit easier for patients and their families during this period."

In the 2019-20 NSW Budget the government committed to spending $45 million in enhancing palliative care services across the state over a four-year period.

The works at Tenterfield are scheduled to start in the second half of 2020.