The Government has given the green light for a new, $60 million hospital for the West Coast.
It will replace the Grey Base Hospital, with new wards, an emergency department and operating theatres.
Health Minister Tony Ryall says design work for the new hospital will begin shortly, with recommendations made to Government early next year.
He says construction is expected to begin in late 2014 and should be completed in 2016.
Canterbury and West Coast District Health Boards David Meates says it's badly needed.
He says Grey Base Hospital has become run down over a long period. "And in addition to that it's got major seismic issues and challenges. "Most of the buildings on the Grey Hospital site are earthquake prone and there's been a lot of strengthening work that's been undertaken just to keep the hospital open."
Mr Meates says building a new hospital is more economically viable than continuing to strengthen the current one.