Funding for the final phase of the £50m Children's Hospital of Wales has been guaranteed by the health minister.
The first phase included medical and cancer wards
Edwina Hart confirmed she would underwrite a £1.2m gap in funding for the running costs to prevent the scheme being held up any further.
But she warned the health bodies involved that she did not expect the money to be drawn down and said she was not letting them "off the hook".
The £10m first phase of the hospital in Cardiff was opened in February 2005.
Based at the University Hospital of Wales (UHW), it includes two 25-bed medical wards and one 16-bed paediatric cancer ward.
The £40m second phase, housing an intensive care unit, operating theatres and surgical wards, is due to open in 2010/11.
In July Cardiff Local Health Board (LHB) announced it could not afford its £1.1m share of expected annual running costs of the completed hospital.
After Cardiff LHB refused to support the blueprint for the second phase a revised plan was submitted and health chiefs have been seeking agreement on the financial arrangements.
Ms Hart told assembly members on Wednesday she was "not prepared to see this scheme held up any longer while commissioners resolve differences between the trust and each other".
"I am therefore announcing today that I will underwrite that £1.2 million from my budget, in order to move the scheme forward," she said.
"I warn the organisations involved that I do not expect this sum of money to be drawn down."
"It is for them to agree a long-term sustainable revenue arrangement".
"My action is designed to prevent the scheme from being held up further now - not to let them off the hook in meeting their obligations," she added.
The hospital has attracted support from celebrity fundraisers
The Noah's Ark Appeal was launched in May 2000 to find money to build Wales' only dedicated children's hospital and has currently raised £10m for the unit.
Before the statement, the chair of the appeal's trustees Lyn Jones welcomed the news that funding for the project appeared to be secured.
But he said it "beggars belief" that the Wales Millennium Centre had recently been given a cash injection of £13.5m when the children's hospital project had had to fight for cash for so long.
Mr Jones said: "I think we could have been helped a little better actually.
"It's taken so long, it's such a needy cause for a children's hospital, the only one in Wales, the only one in Europe.
"It's disgusting really, it should have been handled better."
Hugh Ross, chief executive of Cardiff and Vale NHS Trust welcomed the announcement.
He said the trust, local health boards and Health Commission Wales were committed to working together to secure the future of the hospital.
"It is a vital development that will improve the quality of care we are able to provide to some of our most sick children," he said.
The appeal attracted support from celebrity fundraisers including cricket star Ian Botham, Hollywood actress Catherine Zeta Jones and singers Charlotte Church and Shirley Bassey.
Zeta Jones and her husband, actor Michael Douglas, officially opened the first phase of the hospital in 2006.