BGC Construction Pty Ltd has been awarded the tender to construct the Collie Health Service redevelopment.
Minister for Health, Kim Hames, said the $7.8 million redevelopment would include the refurbishment of the emergency department.
"The start of construction will be welcomed by the local community and is expected to create about 200 jobs and take about 18 months to complete," Hames said.
"It's a significant milestone that will see contemporary, best practice health care facilities in the community."
The works will include the construction of a new administration centre, as well as new areas for medical records, communications and pharmacy stores.
The redevelopment is being undertaken as part of the Southern Inland Health Initiative to improve hospital infrastructure.
Minister for Regional Development, Terry Redman, said health infrastructure was vital for promoting state health.
"Contemporary infrastructure will support health services that can deliver more modern, efficient and interconnected patient diagnoses and care," Redman said.
"The improved facility at Collie will also help in attracting and retaining health service staff, contributing to a skilled workforce that caters to the community's growing needs."
Bateman Architects Pty Ltd has been selected to provide architectural services as lead consultant for the development.
Construction on the project is expected to begin late February.
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