The ageing Doutta Galla Kensington centre could move to the under-utilised buildings, including the old senior citizens base, next to the grand hall on Bellair Street.

In a letter to the Kensington Association, chief executive officer Caz Healy said the site "presents an exciting opportunity which I am keen to explore with all stakeholders, in particular the local community".

Following a Labor election promise, the State Government allocated $1million in 2007 for a feasibility study and master plan for a new community health centre. The study was extended late last year to include the possibility of developing the town hall site.

Ms Healy told Moonee Valley Community News last week there had been preliminary discussions with Melbourne City Council, which controls the site.

The service is also considering redeveloping on its existing site in Gower Street.

Ms Healy said she hoped the State Government would allocate significant funding in this year's budget.

The centre was established in 1975 and has not had a major upgrade since 1982, apart from the addition of a dental clinic.

"It's really well past its use-by date," Ms Healy said. "The current facility is very old and is not really fit for purpose."