Prime Minister Kevin Rudd has secured a deal with all states except Western Australia to become the dominant funder of Australian hospitals.

Mr Rudd has claimed the deal, which came after almost two days of talks at the Council of Australian Governments (COAG) meeting, as a historic agreement for the nation and says there is now no need for a referendum.

But its status as a national agreement under COAG is unclear without WA Premier Colin Barnett's signature alongside those of the other leaders.

Mr Rudd will now hold further talks with Mr Barnett in the coming weeks before funds are due to flow on July 1.

All other states and territories came on board today after Mr Rudd put a total of $5 billion of sweeteners on the table and guaranteed $15 billion in growth funding.

It now means the Federal Government will fund 60 per cent of hospital costs by taking back a third of state GST revenue.

The states will be able to control the distribution of the funds from state pools into which state and Commonwealth funds will be put.

Victoria and NSW were resisting the GST clawback but both came on board today after the Commonwealth agreed to a range of concessions including more money and safeguards surrounding the use of GST funds.

Speaking alongside the state and territory leaders after the end of the COAG meeting, Mr Rudd described the agreement as a good day for Australia.

"Today we've reached an historic agreement. This is a good day for working families," he said.

"It's a good day for mums and dads and patients."

But Mr Barnett says it is unacceptable for WA to give up its GST.

"I am not about to compromise the integrity or the importance of the GST to my state," he said.

"I'm sure if the Prime Minister agrees with what I propose we'll reach agreement - simple as that."

The $5 billion to be spent on sub-acute care, emergency departments, new doctors and elective surgery is due to start flowing from July 1.

Mr Rudd would not say what would happen to the agreement if he could not convince Mr Barnett to come on board by that time.

"I am dead determined that the good folk of Western Australia benefit from these investments," he said.

Mr Barnett said it was his understanding that there would be no deal without all the states agreeing.

"There is not an agreement as such," he told Sky News.

"I am prepared to agree so long as we retain the integrity of the GST arrangement."

The other states and territories, however, were quick to praise the deal and detail the benefits they had gained for each state.

New South Wales Premier Kristina Keneally says her state will now receive more than $6 billion over the next decade.

"That is an injection of funds that simply would not have been possible for us had we not been able to reach this agreement," she said.

"This will make a real difference for the people of Australia."

Victorian Premier John Brumby had earlier vowed not to relinquish control of his GST, but now says the agreement is a great step forward.

"It is an agreement which puts patients first," he said.

"What's being created today is a genuine partnership between the Commonwealth and the states."

Queensland Premier Anna Bligh says the deal is a "no brainer".

The Federal Opposition's health spokesman Peter Dutton has criticised the deal, saying it further complicates the health system.

"Kevin Rudd couldn't help himself in the end but create a great big new bureaucracy," he said.

"This is $5 billion over four years going into a system that he acknowledges is broken.

"The Coalition wants reform in health just like the Australian people, but we don't want Kevin Rudd's great big new bureaucracy."