Wirral Primary Care Trust has backed redevelopment plans for St Catherine's hospital in Birkenhead, Wirral, by committing £19.4m to the project.
The site, constructed originally in the mid 1800's, is said to be in need of updating as 80% of the buildings are still those dating back pre-1948.
Wirral PCT is putting together detailed plans with its partners on the project, Norwest Holst and Prime UK.
Providing the multi-million pound upgrade receives approval from the Strategic Health Authority, it is expected building work will commence in the summer next year.
A further £13.3m of funding is expected to be delivered by an unnamed investor.