Chief Minister Katy Gallagher and vice-chancellor Professor Stephen Parker have signed a heads of agreement giving the go ahead to the development of the University of Canberra Public Hospital.
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The 200-bed sub-acute facility will be built on a 4.8-hectare site on the Bruce campus at the corner of Aikman and Ginninderra Drives.
It will offer a range of rehabilitation services, as well as mental health and some day hospital services.
From 2017, allied health and nursing students will be able to study and undertake internships in their own on-campus hospital.
Physiotherapy students at the university were yesterday showing off their skills in an old computer laboratory refurbished to look like a hospital ward.
North Canberra's public emergency department, surgery and intensive care services will continue to operate from the nearby Calvary public hospital.
Ms Gallagher said the ACT Health Directorate would operate the new hospital, which would include teaching and learning spaces for university health students.
''That will create some incredible opportunities not just for our workforce, but for the students coming through this university,'' she said.
Professor Parker said the hospital would help attract more nursing, midwifery and allied health students to the university.
It would also attract clinicians who were interested in undertaking academic research.
''I think this is one of the most important days in the university's 44-year history of teaching higher education on this campus,'' he said. ''I think it's good for health, it's good for Canberra and it's certainly good for … the University of Canberra.''
The university has agreed to cede the 4.8-hectare block to the territory at no cost on the proviso it be used for a public hospital. The government allocated $4 million to plan and design the hospital, but the cost of the project is yet to be determined.
Ms Gallagher said the final cost would be influenced by whether the government pursued a Public-Private-Partnership for its construction and maintenance.
Initial estimates of about $280 million had not included the provision of the student learning facilities.
The Canberra Liberals have also proposed building a sub-acute hospital in north Canberra at a cost of up to $340 million.
Liberal health spokesman Jeremy Hanson said the party had not decided whether the hospital should be built as a PPP or whether some of its operations should be outsourced to an external organisation.
''I haven't ruled anything in or out. What I want to see is the best delivery of services and there are a number of models of how to achieve that,'' Mr Hanson said.
Health Care Consumers Association of the ACT executive director Darlene Cox said the ability to move patients to the sub-acute facility would free up beds and potentially enable more elective surgeries.
