The trust had looked at leaving Morriston and Singleton hospitals
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Plans to build a 'super-hospital' in Swansea replacing Morriston and Singleton have been dropped.
The newly formed Abertawe Bro Morgannwg University NHS Trust is looking to develop its existing sites instead.
Managers said costs were put at more than £1bn and they would have to wait too long for funds to become available.
Welsh health minister Edwina Hart has been asked to look at plans to centralise emergency care at Morriston with planned surgery at Singleton.
Many of the outdated buildings at Morriston - some of which date back to World War II - would be demolished and replaced.
The trust has also recently entered a partnership with Swansea University to develop services and training.
Many of these will be based at Singleton which borders the main university campus.
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