The Australian Department of Health and Human Services (DHHS) has awarded a $365m contract to John Holland, a subsidiary of project development and contracting group Leighton Holdings, for the redevelopment of Tasmania’s Royal Hobart Hospital.

The hospital redevelopment includes construction of a new building of two towers and ten storeys to accommodate operating theatres, women’s clinics, endoscopy, paediatrics, maternity and mental health functions.

Additionally, the existing clinical areas will be refurbished along with an upgrade of site wide infrastructure.

John Holland will deliver the project under a managing contractor (MC) relationship model in joint venture with Fairbrother.

Stage 1 (completion of the Detailed Design and establishment of the GCS) is scheduled to begin later in September 2013, while Stage 2 construction works are expected to be completed by June 2017.

"We are excited to be part of this important project, which will deliver lasting economic benefits to the state and a large number of new employment opportunities."

Leighton Holdings group managing director Glenn Palin said the contract provides the opportunity for John Holland to develop relationships with the DHHS.

"Our existing relationship with Fairbrother will assist with a smooth transition toward project delivery and the development of a program of works that will minimise disruption to the hospital and accelerate the safe delivery of the project to the department and people of Tasmania," Palin added.

"We are excited to be part of this important project, which will deliver lasting economic benefits to the state and a large number of new employment opportunities."

The hospital project, which will be delivered in a brownfields environment across two separable portions, is expected to enhance health services currently available in Tasmania.