The centre, which will be established by mid-2020, will provide support services for the Taipan (HN90) MRH of the Australian Armed Forces and will be able to support other military and civil helicopters from Australia and overseas.
The structure will be built at an existing Leonardo support centre and is expected to support a team of 12 new technicians for 30 years.
Defence Industry Minister Christopher Pyne said the centre will help Australia build its technical support skills.
"Establishing a repair and overhaul centre in this area translates into less dependence on foreign technical support for our MRH Taipan helicopters, and the same applies to some civilian helicopter operators used in the region," said Minister Pyne.
"This project will bring benefits both to the national defence industry and to the territory. It will create more jobs in this sector in the Victoria area and will ensure greater operational effectiveness in the use of helicopters."
The federal government's investment in the new centre amounts to about $16 million and will be offset by lower maintenance costs for the Taipan MRHs in the remaining life cycle of the fleet. Leonardo has also contributed the same amount.
In 2006 the Australian Armed Forces acquired a fleet of 47 MRH Taipan military helicopters, a dedicated variant of the NH90 for land and naval operations. Next year the fleet will begin replacing Sydney-based Black Hawk helicopters and will perform air support and anti-terrorism tasks.