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Long-awaited details of the independent surgical hospital, to be constructed at Queenstown Country Club, have been released by joint venture partners Southern Cross Hospitals and the Central Lakes Trust.
The hospital would be developed by Sanderson Group which would lease the facility to the joint venture.
Once opened, Southern Cross would manage the hospital - CLT would be the investment partner.
Elective surgical procedures to be available at the new hospital included endoscopy, general surgery, gynaecology, dental, orthopaedic, urology, plastic surgery and ear, nose and throat.
At present patients from the Central Lakes area had to travel to either Invercargill or Dunedin for those procedures.
Central Lakes Trust chief executive Susan Finlay was delighted to finally be able to confirm the new hospital.
"We know it feels like it has taken a while for us to make this announcement but we have a responsibility to carry out robust due diligence on all of our investment decisions.
"Our team has been working closely with Southern Cross Hospitals for the last 12 months to ensure that the solution we were being asked to invest in was going to be in the very best interests of everyone in our community as well as the best use of the funds we are guardians of.''
Ms Finlay said the Southern District Health Board had confirmed its intention to use the hospital for publicly-funded services and ACC-funded patients would also have access to the facility, as would any patients with health insurance or those willing to self-fund procedures.
Health board chief executive Chris Fleming said the board was "excited'' about the opportunity to add to its existing theatre services capacity for elective surgery.
That would allow the DHB to provide "more convenient'' services to the Queenstown and Central Lakes population, he said.
Southern Cross chief executive Terry Moore said both the not-for-profit entity and the trust knew Central Lakes residents had been "crying out for decades'' for surgical facilities.
"We believe this will really make a difference, not just for patients in terms of travelling distances, but also for visiting family and friends.
"With rapid population growth in the area and an increased demand for healthcare services, the new hospital will help to future proof the needs of local residents.''
Clutha-Southland MP Hamish Walker said it was a "good day'' for the region.
"Queenstown has been crying out for better health services for years and today's announcement means this can now become a reality.
"The entire community is thankful for the work of Andrew Blair, the Central Lakes Trust and Southern Cross in providing the solution for a district in critical need of better access to health care.
"Today's announcement is great news and will mean better access to healthcare for all of the district.''
Construction was expected to begin mid next year.