Outline planning permissions has been granted for a new community hospital, new homes and a new retail units at Hengrove Park, Bristol.
More detailed plans for the development - which will include a new 50m swimming pool - must now be lodged with Bristol City Council.
If the scheme goes ahead, it could create up to 2,000 jobs.
The plans have been jointly put together by the city council and the South West Regional Development Agency.
Ian Thompson, head of operations at the RDA, said: "South Bristol has sadly been an area of decline in recent years, but is now the focus for major investment in a range of projects."
Bristol South and West Primary Care Trust Chief Executive, Deborah Evans, said: "Local people have given us a clear message that they do want a South Bristol Community Hospital quickly."