Emergency service crews were called to Frankston Hospital about 10am on Wednesday to reports of a crane falling on the roof of the building.
The machine has since been identified as a piling rig, used in foundation engineering.
Fire Rescue Victoria crews arrived within five minutes and assisted with the evacuation and will remain on scene.
Victoria Police, Ambulance Victoria and WorkSafe were also called to the scene.
The Department of Health said there were no reported injuries and all patients, staff and site workers were safely evacuated.
About 30 patients will have to be moved as investigations into how the rig fell get underway.
Officers have been told the machine was being operated in a construction zone on Yuille Street when it tipped onto the building.
Frankston Hospital is undergoing a $1.1 billion redevelopment, including a 12-storey clinical services tower, 130 more beds and new spaces for mental health, oncology and expanded women's and children's services.
Construction is expected to be completed in 2025.
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