Derriford Hospital in Plymouth is advertising across Europe for firms to design the city's new multi-million pound hospital.
Plans are already in place to refurbish Derriford Hospital
The Vanguard project will see a new hospital complex built and the existing Derriford Hospital refurbished.
It will cost £300m, with the money coming from a private finance initiative (PFI).
Plymouth Hospitals Trust has just issued a notice inviting bids from potential designers.
Hospital managers say it is a significant step forward for the project.
Joint director of planning Andy Ibbs said: "There are still hurdles to overcome before we can be absolutely certain that Vanguard will be delivered, including financial ones.
" However, it is now much more likely."
He added: "We are aiming to deliver something that has the potential to make a real difference to local people by providing new choices, better services and faster treatment in an improved environment."
The Vanguard project will provide an extra 300 beds to help ease the overcrowding problems at Derriford Hospital.