A new £335m super hospital has been given the go-ahead in Cambridgeshire after private finance initiative contracts were signed.
A new £335m hospital complex is to be built in Peterborough
A 612-bed hospital is to be built at Edith Cavell Hospital in Peterborough and is due for completion in 2010.
This complex will also house a 102-bed mental health centre.
At Peterborough Hospital, an integrated care centre will have 34 specialist rehabilitation beds, outpatients, a pharmacy and children's care clinics.
St Clair Armitage, project director, said: "It's really exciting now as we've reached the point when construction starts and the reality of new health care for Peterborough is going to happen.
"The partner trusts and our colleagues within Progress Health who are financing the developments have been committed to the project for many years.
"We have had to negotiate some significant hurdles to make sure the people of Greater Peterborough are provided with new healthcare facilities for the 21st Century."
The main hospital will include an emergency care centre plus units for high-tech diagnostics, women and children's clinics, cancer treatment, specialist rehabilitation, renal dialysis and multi-disciplinary training.
The mental health unit will include adult acute psychiatric wards plus units for psychiatric intensive care, older people's mental health and a specialist service for people with learning disabilities.
An integrated care centre, run by Peterborough Primary Care Trust, will be built on the site of the Fenland Wing at Peterborough District Hospital.
It will include 34 specialist rehabilitation beds, a pharmacy, outpatient diagnostic and treatment centre, general rehabilitation services and children's care centre opening in 2009.
Design, planning and approval has taken four years with contracts formally agreed and finalised this week by Peterborough and Stamford Hospitals NHS Foundation Trust, Peterborough Primary Care Trust, Cambridgeshire and Peterborough Mental Health Partnership Trust and Progress Health.
Mr Armitage also said: "We want to keep disruption to an absolute minimum but we are undertaking three large-scale building developments.
"There may be times, during the next three years, when access to our hospital sites will be restricted."
The construction contract was won by Multiplex Group the same company behind the new Wembley Stadium and it is financed through Progress Health.