Boris Johnson is set to pledge spending to 20 NHS hospitals later today, August 5.
Shadow Health Secretary Jon Ashworth claimed the hospitals chosen had been "promised" money for cutting their costs and after being blocked from spending, had now been told "they can spend that extra money after all".
However Matt Hancock, speaking to ITV News, said the new money announced by Boris Johnson, had "come from the treasury" and "none of this is recycled within the NHS".
He said: "There's £1.8 billion increase in the NHS capital budget - every single penny is extra money allocated from the treasury.
"Some of that means that I can unlock investments that hospitals wanted to do. In other cases I'm able to announce new investments that have gone into some areas but every single penny of the £1.8 billion is newly allocated from the treasury."
The 4 NHS hospitals in the Midlands that are set to be included in Boris Johnson's speech are:
University Hospitals Birmingham will be pledged £97.1 million to provide a new purpose-built hospital facility, replacing outdated outpatient, treatment and diagnostic accommodation
United Lincolnshire Hospitals Trust will be pledged £21.3 million to improve patient flow in Boston by developing urgent and emergency care zones in A&E
Wye Valley NHS Trust will be pledged £23.6 million to provide new hospital wards in Hereford, providing 72 beds
University Hospitals of North Midlands NHS Trust will be pledged £17.6 million to create three new modern wards to improve capacity and patient flow in Stoke, delivering approximately 84 beds for this winter
The cash injection has been widely criticised as "a drop in the ocean", as experts called for more funding to be committed across the health system.
Experts said the sum, while desperately needed, is just a fraction of what is required to fix ailing NHS buildings across the country.
Politicians warned that his no-deal Brexit stance would jeopardise his spending ability, with Labour saying such a departure from the EU will "put lives at risk".
The announcement prompted nurses, charities and health think tanks to call for additional funding.
Mr Johnson said he is "determined to deliver" the promises of the Brexit referendum campaign, as he announced the sum equivalent to roughly £3.5 million a week to be paid this year.
He has received continued criticism for the battle bus claim that leaving the EU would allow the UK to take back control of £350 million a week, with some boosting the NHS.
Of the latest pledge, £850 million will go towards funding the vital upgrades to the 20 hospitals.
But Ben Gershlick, from the Health Foundation charity, said that "years of under-investment in the NHS's infrastructure means this extra money risks being little more than a drop in the ocean".
He warned that NHS facilities are "in major disrepair" in England, with a maintenance backlog of more than £6 billion, a figure also cited by other experts.
The chief executive at the Nuffield Trust health think tank, Nigel Edwards, said the sum "will only be a fraction of what it would cost to really upgrade 20 hospitals".
"Nobody should expect shiny new hospitals in their towns any time soon," he added.
In an article in The Sunday Times, Mr Johnson acknowledged his ability to spend the cash was based on the economy's strength.
Critics pointed out that the dire warnings over the effect on finances that a no-deal Brexit would bring could jeopardise the NHS.
Shadow health secretary Jonathan Ashworth said no deal would be "a catastrophe" for the health service, particularly if it occurs by the October 31 deadline and ahead of the winter squeeze.
Royal College of Nursing chief executive Dame Donna Kinnair said the funding would be backed by colleagues "who have to work in cramped and outdated conditions".
However, after this announcement, nursing staff will look to the Prime Minister with even greater expectation of addressing the workforce crisis," she said.
Dame Donna called for at least an extra £1 billion yearly to attract new nurses into education.
Alzheimer's Society policy director Sally Copley said they were "disappointed that social care is once again playing second fiddle".
"We urge the Prime Minister to provide an NHS dementia fund to end the injustice people with dementia face today," she added.
Mr Johnson has threatened a no-deal departure as part of his "do-or-die" commitment to exit the EU by the Halloween deadline.
This is despite the Government's spending watchdog, the Office for Budget Responsibility, warning no deal would increase borrowing by £30 billion a year and plunge the nation into recession.
Liberal Democrat health spokeswoman Baroness Jolly said Mr Johnson's pledge "will not be worth the paper it's written on" when a no deal hits.
Cancer Research UK policy director Emma Greenwood said the investment would go "some way to address the immense strain" the NHS is under but stressed that funding in recruitment and training is essential to meet rising demand.
Mr Johnson is expected to visit a hospital on Monday to formally announce the new funding.
It will benefit facilities across England, including in London, Birmingham, Manchester and Cornwall.
His pledge will add to Theresa May's £33.9 billion annual increase for the health service by 2023/24.<
NHS England chief executive Simon Stevens said: "This is a significant start to the much needed capital investment so that our nurses, doctors and other NHS staff will be able to care for their patients in modern facilities with state of the art equipment."