The Adamson Hospital in Cupar, Scotland will undergo extensive refurbishment to create a 'one stop shop' and meet the healthcare needs of the region and surrounding area.
Following the modernisation, the hospital will offer consultant outpatient services, a minor injuries service, diagnostic services such as X-ray and ultrasound, and physiotherapy and paediatric services.
The hospital will also feature enhanced GP services including nurse and allied health professional-led clinics, speech and language therapy and podiatry.
The hospital will retain a new dental service at the site, adding to the range of services offered at the facility, the government said.
The government-sponsored $16.7m (£10m) project is being led by the Glenrothes and North East Fife Community Health Partnership.
Works has already begun at the hospital and is expected to be complete in October 2011.