Funding for a new hospital on the West Coast to replace Grey Base Hospital has been approved and the project is now in its final design phase.
Cabinet has signed off on the $67 million development plan which the Health Minister Tony Ryall described as the biggest hospital investment per head of population ever made.
The 60-bed facility in Greymouth will feature an intensive care unit, emergency department, three state-of-the-art operating theatres and a bigger maternity unit.
Mr Ryall said a further $1 million will be provided for demolition costs and additional funding for an inpatient mental health facility.
"Clinicians will be changing the way they provide services over time, and I think there's an acceptance that, particularly in some of our more remote rural areas, the way services are provided have to change," he said.
Grey District Council Mayor Tony Kokshoorn said it was great news and means people don't have to cross the Southern Alps to get the treatment they need.
"In the past, because of the isolation of the West Coast, we have had to move many people when we couldn't have doctors and surgeons to Christchurch. Now, with pregnant mums that is very very risky, and especially in winter, when the passes are closed. This will deliver that now," he said.