In this publication, we discuss the recent upgrade of the intermediate power amplifier (IPA) of the 520 MeV Cyclotron's RF system. The main goal of this upgrade was to separate first and second stages of the IPA, and thus achieve a modular configuration. A novel neutralization circuit for the second stage was designed, simulated, fabricated and tested with maximal CW power of up to 65 kW. We discuss the neutralization tuning, input matching processes and the results of the high-power tests. The high-power measurements indicated that the attained output power is higher than 65 kW, the power gain is 20 dB, input VSWR is less than 1.3, the phase shift is less than two degrees in the operational power range of 20–35 kW. Finally, the Power-Added-Efficiency (PAE) reached 68% at the operating frequency of 23.06 MHz. Currently, the new IPA is in stable operation as a part of 520 MeV Cyclotron's RF system.