Interserve has won an £85m deal to upgrade and refurbish the Prince Charles district general hospital in Merthyr Tydfil.
The contract was awarded on behalf of Cwm Taf University Health Board, following approval by the Welsh Government of its business case.
It is the first contract awarded to Interserve under the Designed for Life 3 framework, to which it was appointed in November 2012, having won deals under the Welsh Government’s Designed for Life 1 framework.
The total investment in the project by the health board is £119m.
Works include the replacement of existing M&E services, ground and first-floor refurbishment, asbestos removal, fire protection, infrastructure and car park upgrades.
Facilities will be replaced across the hospital and the helipad will also be relocated. Interserve Engineering Services will replace M&E services.
Design and survey work has already started, with enabling works expected to finish in June 2015 in readiness for the main building works.
The project is expected to take seven years to complete, with the hospital remaining fully operational throughout.
Interserve Construction divisional director Andrew Edmonds said: “We are looking forward to working closely and collaboratively with the health board and its advisers, together with our local design partners and supply chain.
“Together, we aim to ensure patients in Merthyr Tydfil and neighbouring areas will benefit from the highest quality healthcare in modern, fit-for-purpose facilities.”