Demolition work has started at Walton Hospital, located off Rice Lane in Liverpool, to make way for the construction of a new inpatient facility for Mersey Care NHT Trust.
The new 85-bedroom facility will provide care for people in Liverpool, Knowlsey and South Sefton to help aid their recovery from mental health problems such as depression, dementia and learning disabilities.
The work is being undertaken by development company Liverpool & Sefton Health Partnership, which is also working on a similar scheme at the former Ian Skelly car dealership site on Edge Lane.
A Farrans-Heron Brothers joint venture, a contractor partner with Liverpool & Sefton Health Partnership, is carrying out the demolition work at Walton Hospital.
Work will start on the two new centres, costing a combined £48m, early in 2012 subject to Government approval.
Graham Pink, chief executive of Liverpool & Sefton Health Partnership, said: "Starting the demolition of the existing hospital buildings will give us a great head start on the construction of the new facility at Walton in the new year.
"As a company we are committed to providing first class health and social care buildings which improve people's health and wellbeing in our communities and are really proud to be working with Mersey Care on these prestigious projects. We know this is a project which will make a big difference to the lives of many people in Merseyside."
John Doyle, project director for Mersey Care, added: "Having secured the land at Walton and recently received planning approval, I'm delighted to see tangible evidence of progress now taking place."
Since the company's establishment in 2004, Liverpool & Sefton Health Partnership has completed health centres in Picton, Walton, Southport, Ainsdale, Litherland, Everton, Aintree, Garston, and Speke, and has a further four currently under construction.
Walton Hospital closed at the end of last year and all its services transferred to Fazakerley.
Both of the new hospitals are expected to open in 2013.