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Joint venture partners Central Lakes Trust (CLT) and Southern Cross Hospitals have finally revealed details of the proposed facility, to be built by Sanderson Group on land at the Queenstown Country Club, after about 18 months of discussions.
After construction, the hospital would be leased to the joint venture. Southern Cross would manage it and CLT would be the investment partner.
Trust chief executive Susan Finlay said in a statement planned elective surgical procedures included endoscopy, general surgery, gynaecology, dental, orthopaedic, urology, plastic surgery and ear, nose and throat, saving people travelling to Invercargill or Dunedin.
Southern District Health Board chief executive Chris Fleming said the board had now signed a memorandum of understanding with the joint venture to ''progress discussions'' on ways the new hospital could support the public hospital system.
No cost structures or commercial arrangements had been proposed, so it was ''too early to say'' what services would be supported through the new hospital, to what extent, or how it would be delivered.
Mr Fleming said, ideally, the board wanted to ensure its surgeons could travel to Queenstown in a planned manner to carry out ''publicly-resourced day surgery, do outpatients and, presumably, they will undertake private activity during the same visit''.
Ms Finlay said ACC-funded patients would also have access to the hospital, as would any patients with health insurance, or those willing to self-fund.
A resource consent application for the hospital, which would have three operating theatres, seven recovery beds, 15 post-operative care beds and consultant rooms, was lodged last month.
It was rejected by Queenstown Lakes District Council senior planner Alex Dunn because it was deemed ''incomplete'' under the Resource Management Act.
That was, in part, because replacing the originally-proposed pool and gym facility and ''a couple'' of townhouses with a hospital was not considered, on face value, to be a variation, which had been sought.
Given the effects were likely to be ''substantially different'' a full assessment was required.
Yesterday, however, the joint venture partners said construction was expected to begin mid-2020 and be complete by late 2021.
Queenstown Lakes Mayor Jim Boult said it was a ''very positive announcement'' that had been coming for a long time.
''[I'm] pleased they've finally got it together.
''I don't think we're ever going to see heart bypass operations there - but for all those minor bits and pieces that people have to go to Invercargill or Dunedin for at the present time, I think it's really great news.''
Queenstown Lakes District councillor and Central Lakes Health Network chairman John MacDonald, who is standing for the health board, said it was ''just fantastic''.
''It is great to see the support from the trust, obviously enabling this to happen, Southern Cross are going to bring the expertise to the table which is fantastic and even better is the fact that the DHB is going to use the facility as well for local people, and not just people with medical insurance, which is really positive.''