Other councils involved in the enterprise are Banyule, Brimbank, Darebin, Greater Geelong, Greater Dandenong, Hobsons Bay, Hume, Macedon Ranges, Melton, Moreland, Moonee Valley, Stonnington and Yarra.

Trading as Community Chef, the food conglomerate will prepare up to 10,000 meals a day and 2.6million annually for frail and aged residents.

Fourteen councils are involved in the production company, and 11 of them form Regional Kitchen - the land and building company that will build a state-of-the-art kitchen to lease to Community Chef.

Brimbank, Macedon Ranges and Maribyrnong are not shareholders in Regional Kitchen.

Federal Health Minister Nicola Roxon made the funding announcement at the home of a Meals on Wheels recipient in her Altona electorate, where the kitchen will be built.

Newport resident Betty Fearn-Wannan, 86, has been receiving home-delivered meals from the council for 20 years.

She said she was partial to the curries. Her partner Alan Wright, also 86, said he was "staggered" by the menu variety.

Ms Roxon said there was an opportunity for more councils to come on board as shareholders in the kitchen enterprise.

"I don't think this is a high-risk project at all," she said. "I think quite the opposite.

"We already have councils as investors, we have the State Government investing, a really well-developed plan, and one that's ready to go - which is all the things we're looking for when we're investing to provide economic stimulus. We're ready to go now, and the kitchen will create jobs.

"It's important to give people independence to be able to stay in their own home, but also for us to know that we can provide more than 50 ongoing jobs in this whole region."

The kitchen, to be built in Drake Boulevard, will create 30 jobs during construction phase. It is expected to be completed by the middle of next year and operating later in the year.

The State Government has contributed $6million and local government $2.25million.

Community Chef chief executive Hayden Raysmith said the remainder would be borrowed over 15 years.

He said Community Chef would remain a competitive and nutritious alternative to frozen dinners.

"At the moment, the business model shows that we can do that for the next 20 years."

There are six different meal choices, as well as halal, kosher and specialist meals, with dishes created in consultation with celebrity chef Gabriel Gate.