The Scottish Government has approved the outline business case for the £842m project which will see an integrated children's and adult hospital built on the site of the current Southern General Hospital.
Speaking to the STUC conference in Inverness, First Minister Alex Salmond said: "This Scottish Government is determined to get value for money for the public purse and that is exactly what this deal represents.
"By funding the entire project through public finance, we are ensuring it is deliverable, affordable, sustainable and represents best value for money for the taxpayer."
Salmond said patients throughout the West of Scotland will reap the benefits of single-site hospital care, providing seamless and specialised treatment.
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The NHS Board have worked closely with the Carbon Trust to ensure that the proposed building and transport links are sustainable.
Key benefits of the New Southern Hospital project include, single rooms for all patients, maternity, paediatric and adult acute services on one site.
Public Health Minister Shona Robison, who today visited the Southern General, said: "By increasing efficiency and streamlining services, patients can look forward to shorter waiting times and better continuity of care."
NHS Greater Glasgow and Clyde is providing £270m towards the project, with £20m from locally held endowments and the balance of £552 million provided by the Scottish Government.
The New Southern Hospital project is a key component of NHS Greater Glasgow and Clyde's proposals to modernise acute health services in Glasgow.
The proposal will see a new 1,109-bed adult hospital built alongside a 240-bed children's hospital. The adult hospital will provide acute in-patient care, some medical day cases and out-patient clinics.
Day surgery will be carried out at the New Victoria Hospital. The new children's hospital will provide accident and emergency services as well as the full range of in-patient and day case paediatric services.
A new laboratory will also be built, providing biochemistry, haematology, blood transfusion and mortuary services.
Approximately 630 beds will be retained on the existing Southern site within the Institute of Neurological Services, maternity, spinal injuries and Langlands buildings. The Langlands facility provides older people's services and services for the young physically disabled.
(GK/NS)
