Today's announcement comes after a long wait for confirmation of where the new hospital will be built.
During that wait the Dunedin City Council launched a campaign for the hospital to be built in the central city.
Ahead of last year's general election then prime minister Bill English announced the Government would be spending $1.2 billion to $1.4 billion on replacing Dunedin's ageing hospital.
Following the 2017 general election, Dr Clark installed former Labour health minister Pete Hodgson as the new convener of the Southern Partnership Group - the body co-ordinating the development of the hospital.
In December, he ruled out several sites mooted for the hospital - including the current site.
The rebuild of the hospital has long been called for because of the dilapidated state of the current buildings, which were erected between 1935 and 1993,
A 2012 report suggested the clinical services building had a life of five years.
Today, vital departments such as emergency, radiology, the fracture clinic and day surgery struggle to tend to patients in a building which leaks, is full of asbestos and has an outdated and inefficient layout.