The Bath House project received planning permission in 2006
A long-running dispute over a strip of land which brought a £50m building scheme in Ceredigion to a standstill has been resolved.
The Bath House project in Cardigan will see a hospital, supermarket, housing and a doctor's surgery built, and is expected to create 600 jobs.
Ceredigion council said an agreement between a landowner and the developers had been reached.
The project, which has planning permission, had hinged on the land.
Its owner T Ieuan Davies had refused to sell it to developers Liberty Mercian because he feared the development would add to the Cardigan's traffic problems.
The controversial scheme to redevelop the Bath House area was originally granted planning consent in September 2006 following a public inquiry the previous year.
But developers were forced to revise and re-submit their plans when they could not reach an agreement with Mr Davies. However, they were subsequently turned down by Ceredigion council.
The council said the planning decision made in 2006 still stood so the project could now proceed.
A spokesman said it "welcomed the news that at last one of the stumbling obstacles to development of the Bath House area has been overcome".
"Ceredigion County Council and its Welsh Assembly Government partners have invested over £26m in the regeneration of Cardigan area over the three years between 2003 to 2006 and, at the time, the Bath House scheme was acknowledged as the next strategic stage in the regeneration of Cardigan.
"It is indeed pleasing to note that the developers and the landowner have concluded negotiations successfully and we are able to move forward in the development of this area in the knowledge this is the preferred site for the new Cardigan hospital."
Emyr Williams, Development Director, Liberty-Mercian, said the decision meant Cardigan will "finally get the development it desperately needs along with a substantial number of community benefits.
"It will provide the town with a much-needed social and economic boost as recession takes a grip elsewhere in Wales."