Finchley Memorial Hospital has secured a £10 million Government cash grant to help fund its redevelopment.
The money will be invested in equipment for the hospital, in Granville Road, North Finchley, as well as buying the adjacent Bow Lane playing fields, on which the hospital will be rebuilt.
Alison Blair, director of primary care and deputy chief executive of Barnet PCT, said: "This money is a significant investment for the new hospital. We are very grateful for having such high level support and confidence in the scheme.
"Making sure all patients have equal access to high quality health care is priority for Barnet PCT and our partners.
"By upgrading premises we start to create a network of modern facilities which will provide more room and help us to offer a wider range of services closer to people's homes."
The redevelopment is in line with the Government's strategy outlined in the Our Health, Our Care, Our Say white paper, which lays out plans to give patients greater choice over their healthcare.
Barnet Primary Care Trust aims to move more services out of major hospitals and into the community, after a public consultation last year.
The proposals have drawn criticism on the basis that essential maternity, emergency and surgery services in the region's acute hospitals - Barnet and Chase Farm Hospitals - will be scaled back.
Councillor Helena Hart, cabinet member for public health, said: "The redevelopment of Finchley Memorial Hospital is an integral part of improving health services locally, and something for which we have been fighting for, together with the PCT, for some time now.
"Ensuring all residents have equal access to high-quality healthcare, and providing a wide range of services is a priority. This timely financial boost will make this a reality for the residents of Finchley and the surrounding area."
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