Local health board NHS Greater Glasgow and Clyde (NHSGGC) have recommended public funding as opposed to private for the Southern General Hospital in Glasgow.
The move follows controversy over the use of private sector funding for public sector projects like the Labour approved PFI initiative for Hairmyres Hospital in East Kilbride.
Planning permission has already been granted by Glasgow City Council for the development which will deliver a "health" village, including an adult hospital with 1,109 beds and a 240-bed children's hospital by 2014.
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A spokeswoman for the NHS Greater Glasgow and Clyde, said: "Having already achieved outline planning permission from Glasgow City Council, NHSGGC is now required to submit a case to the Scottish Government that demonstrates affordability and value for money to the taxpayer.
"The outline business case recommends traditional procurement - fully publicly funded - as the board's preferred option."
Tom Divers, Chief Executive of NHS Greater Glasgow, also commented: "This is an exciting time on the eve of the 60th anniversary of the NHS to be taking forward plans to create a showpiece major hospital development in the heart of Glasgow. The outline business case is a key milestone in realising that ambition."
He continued: "Getting to this stage in delivering this ambitious project is testament to our clinical teams, health planners and finance colleagues."
The case for taxpayers' money is to be put to Government ministers for their approval.
(JM)
