A £2.3m scheme to redevelop Malton Hospital is due to start in the next few weeks.
Local building company Scothern Construction has won the contract to carry out the scheme, which health chiefs believe will ensure the hospital's future and long term security.
The scheme will include improved in-patient accommodation and better facilities for out-patients, minor injury cases, day case surgery, dental services, out of hours services and rehabilitation.
Kevin Pulford, of Scarborough, Whitby and Ryedale Primary Care Trust, said the development was to be carried out in 11 phases up to May 2006.
Mr Pulford said a funding shortfall of £237,000 would be met through additional capital advances.
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