Otago District Health Board group manager Sonja Dillon said the move would involve savings, but she was unable to give the projected amount because she said it was commercially sensitive.
Dunedin Hospital provides food for Dunedin and Wakari Hospitals.
Southland District Health Board has a contract with Spotless Services which will end on March 31.
The Meals on Wheels service will also be included.
The food will comprise soups, sauces, stews, braised food and other casserole-style dishes which amount to about 50% of patient meals.
Vegetables, salads, desserts and oven-baked food for Lakes District Hospital and Southland Hospital will be prepared at those hospitals.
Food prepared in Dunedin will be transported in bulk three or four times a week to Invercargill and Queenstown.
Planning had taken into account the possibility of trucks being unable to reach their destination for reasons including adverse weather.
If this happened, it was not expected to cause difficulties because there would be a few days' food in storage at the various hospitals.
The cook-chill production method involves fully cooking the food, rapidly chilling and packaging it, then storing it at low temperature until it is reheated extremely slowly when needed.
The nutritional content of the food and its appearance were not affected by the cook-chill method.
The benefits were that much could be cooked in advance, and reheated without spoiling.
It would reduce waste and schedule production to match resources.
The move would involve some staff changes including the executive chef at Dunedin Hospital taking on a regional role as hospitality operations manager, the appointment of a regional food and beverage manager to oversee all catering activities, a hospitality site manager at Invercargill and the overseeing of patient dietary requirements by a regional production dietitian.
Most staff who were with Spotless Services in Southland are expected to transfer to the district health board and arrangements for this were still being worked through with the contractor, Ms Dillon said.
