The healthcare facility spanning 270,000ft2 is expected to be operational by 3 February.
This hospital will help to address the national emergency situation arising due to the spread of the deadliest virus and the insufficiency of current healthcare requirements, Xinhua news agency reported, citing officials.
Transportation has been shut down in around 12 cities on the eve of the Lunar New Year. These cities together have a total population of about 35 million.
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China constructed a hospital in the rural outskirts of Beijing within a week to treat people suffering from severe acute respiratory syndrome (SARS) in 2003.
SARS killed around 350 people in mainland China and around 300 in Hong Kong.
Prefabricated cabins were used to build the Xiaotangshan Hospital and the Wuhan facility is also expected to be of the same materials.
Wuhan, which has a population of more than 11 million, has been treating patients infected with deadliest virus by isolating them in around 60 clinics and hospitals.
Around eight hospitals in the city, which is the epicentre of the coronavirus outbreak, has sought donations of goggles, masks, and protective gear.
On 23 January, WHO met again and postponed decision on international health emergency declaration of the deadly coronavirus.
Meanwhile, airports across the world have stepped up screening of passengers coming from Wuhan.