The Government will spend $300 million on a major upgrade of the New Plymouth hospital, including a new emergency department and a rooftop helipad.
The funding comes from the $1.7 billion which was earmarked for upgrading health facilities and hospitals in the budget.
Health Minister David Clark said the people of New Plymouth deserve a modern, fit-for-purpose facility which can support the hospital's already high-quality services.
He said the upgrades would make the building five stars on the Greenstar certification – meaning it meets a high level of energy efficiency.
As well as the new emergency department and helipad, the new wing of the hospital will also have a new intensive care unit and a purpose-built maternity facility.
The hospital's laboratory and radiology services will receive an upgrade, and a new morgue will be built.
"This much-needed work at Taranaki Base Hospital will address the poor condition and seismic issues with the buildings that currently house the remainder of acute clinical services," Clark said.
"It will improve the resilience of the hospital so it can provide emergency clinical care after a major disaster."
Construction of the new East Wing at Taranaki Base Hospital is expected to begin between the end of next year and early 2021.
The new wing is expected to open in late 2023.
Clark said the upgraded facilities would improve how acute clinical services were delivered.
"Today's announcement means the people of Taranaki can be confident their hospital will continue to deliver the care they need into the future.
"But there is much more to be done to improve hospital facilities around the country and I expect to make further investment announcements in the coming days and weeks."
The $300 million spend is the most money allocated from the $1.7 billion to date.
In August last year, $275m was allocated to fixing infrastructure issues at Auckland City Hospital and Greenlane Clinical Centre and almost $250m was spent on a new elective surgery unit at North Shore Hospital.