Harlow is to get a brand new hospital to replace the ageing Princess Alexandra.
The announcement on the eve of the Conservative party conference comes just two days after Boris Johnson visited the Essex hospital.
Health Secretary and West Suffolk MP Matt Hancock said, as part of the Health Infrastructure Plan, 40 new hospitals would be built across England over the next decade.
The Princess Alexandra Hospital Trust is one of six new hospital builds getting the full go-ahead today.
The news has been welcomed by local MP Rob Halfon who's campaigned for years to get the crumbling hospital replaced. He said he's thrilled by the announcement.
The projects are being funded with a £2.7 billion cash injection of new money from the Treasury.
Also in the six projects named today is the West Hertfordshire Trust, which covers hospitals in Watford, St Albans and Hemel Hempstead.
The trust provides services for patients in Bedfordshire and East Hertfordshire too.
The government also announced a second round of funding which will see 21 hospital trusts share £100m to develop their plans for new buildings and expansions.
Addenbrooke's Hospital in Cambridge, James Paget Hospital in Great Yarmouth, Kettering General Hospital, Milton Keynes Hospital, and West Suffolk Hospital in Bury St Edmunds are among them.
Addenbrooke's chief executive Roland Sinker said the money meant the trust could draw up its plans for its rebuild while it worked on securing full funding. He said he was hopeful work on the new building could begin as early as 2025.
The hospital wants to create a state-of-the-art site that will underpin its role at the centre of medical research in the UK.
The new investment comes in addition to the £33.9 billion increase in cash funding for the day-to-day running of the NHS being delivered by the Government over the next five years.