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Work is expected to begin in 2020 on the smaller outpatient and day surgery building, which looks likely to be built by St Andrew St where the Wilson Parking building is located.
That building is expected to be joined by a bridge to a larger inpatient building — which has no set finish date — on the former Cadbury site.
The Ministry of Health said yesterday a property had been bought "in the middle of the Wilson’s block", and negotiations were progressing on another property.
Health Minister David Clark announced the hospital would be built in two stages with the outpatient and day surgery building due to be finished more than three years earlier than anticipated.
The smaller building would be opened in two stages, in November 2023 and November 2024.
Day surgery could begin there in November 2023. But the larger inpatient building would be finished five or six years after that, meaning the end of the build would be 2028 or 2029, rather than the mid-2026 date planned.
Dr Clark said the decision came after "some months of thinking and planning", and was conditional on Cabinet and budgetary processes being secured.
"The underlying issue is that the existing Dunedin Hospital will not last the distance in its current state.
"Had we done nothing, the existing hospital would have progressively struggled to deliver adequate services, especially in the emergency department and in surgical services. Southern Partnership Group chairman Pete Hodgson said by bringing forward the day surgery and outpatient building, the building work could be spread out, helping remedy an expected shortage of workers.
It was about the size of the combined workforce on University of Otago construction projects at present.
The work could be part of a training programme for apprentices, who would later be able to work as tradesmen and women on the larger inpatients building.
Mr Hodgson said the two buildings would be tendered as separate contracts.
"Even if the larger building contract involves an offshore player, more work will be available to Otago and New Zealand firms by splitting the work, including the subcontracts."
Tenders would go out next year for a main architect and engineering firm for both buildings.
The smaller building was expected to abut St Andrew St, as the building was "very likely to be bridged" to the larger inpatient building on the Cadbury block.
Mr Hodgson said shifting an electricity substation on the northern block was not expected to be an issue, as the new building was expected to be situated to the south of the block.
He was confident the workforce of 350 people would be available for the work that was being fast-tracked.
Mr Hodgson said there would be a longer period of disruption, especially during construction of the larger building.
However, the disruptions would be managed "as well as anyone can manage them".
Ministry of Health performance and infrastructure chief adviser John Hazeldine said the ministry was engaging a heritage consultant, town planner, and independent quality assurance services. Its project team was progressing site acquisition for the final land blocks for the new hospital.
The project team was also progressing demolition of two derelict buildings on the Cadbury car park site.
It was expected those buildings would be removed in January.
National health spokesman Michael Woodhouse said yesterday’s announcement was positive progress, but questioned what the cost implications for the project were.
• New day surgery and outpatients building to be started in 2020, completed in 2023-24.
• Day surgery able to start in new facility in November 2023.
• Building expected to be built where Wilson Parking building stands.
• May be connected to larger building on Cadbury site by bridge over St Andrew St.
• Some land on site has already been bought.
• 350 workers expected to be needed on the fast-tracked build.