The Victorian and federal governments are set to sign off on a formal agreement for a 500-bed quarantine hub, to be built at Lindsay Fox’s Avalon Airport.

Treasurer Josh Frydenberg signalled a deal would be announced as soon as Friday’s national cabinet meeting, after a memorandum of understanding was handed to the Andrews government for the $200 million-plus project on Thursday afternoon.

“We have been working through the details of that proposal and we’ve said publicly that we’re favourably disposed and a decision is imminent,” he said.

“This designated facility that Victoria has proposed for quarantine is over and above the existing hotel quarantine facility.”

In February, acting Victorian Premier James Merlino proposed the federally owned facility be built next to an animal quarantine site at Mickleham, north of Melbourne, but the Morrison government prefers the Avalon site, near Geelong.

Mr Frydenberg told radio 3AW Avalon had “some very positive characteristics”, including its proximity to the airport, which is on federal government land and leased to Mr Fox.

The federal opposition has attacked the government for its failure to build new stand-alone quarantine sites to complement the Howard Springs facility, near Darwin.

Leaks from hotel quarantine, including the South Australian case that sparked Melbourne’s latest lockdown, have added urgency to the plan.

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