Health Minister Simeon Brown said he is confident Dunedin Hospital's rebuild will finally be delivered on time and within budget.
During a visit to the city on Friday, Brown confirmed CPB Contractors as the lead contractor for the new inpatient building.
The project has faced years of setbacks and cost overruns, dating back to when Sir John Key was prime minister.
Construction began under the former Labour government but was delayed, and was again paused while the current coalition reviewed the scope and costs.
Work restarted in July this year.
The inpatient building, once expected to be finished by 2028, is now due to accept patients in 2031.
The neighbouring outpatient facility, originally scheduled to open in late 2023, is now expected to be operational by October 2026.
Brown said the Government had taken steps to lock in delivery.
"Ultimately, today is about moving forward," he told RNZ.
"Decisions have been made and we have put in place a Crown manager, Evan Davies, who will ensure the contract is delivered on time and within budget, and importantly, that provides really strong contractor engagement as well so that we're able to hold them to account."
He said the new contract had been designed with "a range of performance measures within it to incentivise on-time and on-budget performance".
"The Government will be working very closely with the Crown manager to make sure that this project is delivered on time and on budget, and importantly delivered so we can get the health benefits that are really needed for the Dunedin, Otago and Southland communities."
Labour first campaigned on replacing the hospital in 2017, raising concerns about whether the existing facility could last another decade.
Brown said work was underway to keep the current hospital functioning until the new buildings were completed.
"Clearly, there is a need for the new hospital," he said.
"Since I've become minister, I've been very clear this is a top priority for me.
"Back in January… we confirmed that the old Cadbury site would be the location. We got work back underway and construction back underway in the middle of this year.
"Now today's construction contract means we can get going with the construction so we can deliver the health benefits that are needed both for patients and also for the clinicians… so they have a modern, reliable infrastructure to be able to deliver that care."
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