Health Minister Dr David Clark has confirmed the new Dunedin Hospital will be built on multiple blocks in central Dunedin, including all of the former Cadbury factory site.
The site will be made up of the western side of the Cadbury site, together with the block bordered by Hanover, Castle, Cumberland and St Andrew Sts.
However, rather than including only part of the Cadbury site, it will include all of it as well as the Cadbury car park.
The plot includes land occupied by the former Cadbury factory, Work and Income, Vehicle Testing NZ and a cluster of other businesses, as well as a University of Otago hall of residence.
Cadbury ceased making chocolate at its Cumberland St site in March, although the Cadbury World tourist attraction remains open, and consent has been issued for it to move to the other side of the Cadbury site.
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fracture clinic and day surgery struggle to tend to patients in a building which leaks, is full of asbestos and has an outdated and inefficient layout.