Newcastle Private Hospital will spend $80 million over the next three years to cater for growing demand in the Hunter region.
The expansion includes new doctor consulting rooms, 30 additional single patient rooms, three more operating theatres, and 12 new critical care beds.
The major project will be done in three phases, with construction on the first stage expected to start early this year.
Newcastle Private Hospital general manager Michael Mitchell said the expansion would meet the growing demand for health services in the area.
“The demand on health services in the greater Newcastle area is steadily increasing,” Mr Mitchell said.
“We feel we're in the right place in the life cycle of the hospital to start to expand - we feel that there's capacity and demand there.
“The development will ensure that we can provide our patients with state-of-the-art healthcare well into the future.”
Under the plans there will also be 225 car parking spaces added at the Rankin Park facility.
The parking facilities, consulting space and the new critical care beds will be built as part of the first stage.
Mr Mitchell said there will be minimal disruption to patients and doctors while the project is taking place.
“A key focus was that we did not cause great disruption to the service of the hospitals whilst undertaking the development,” he said.
Newcastle Private Hospital is owned and operated by Healthscope.