A community hospital for south Bristol has finally been given full Government approval after more than 60 years of campaigning.

The Department of Health has signed off the £54 million project and construction is likely to start on the Hengrove Park site next spring.

All that remains for the long-awaited hospital to be built is for the final contracts to be signed in February, ready for construction to start shortly afterwards.

Planning permission was granted for the project back in March 2008, alongside the leisure centre and skills academy that make up the rest of £100m first phase of the Hengrove Park regeneration.

The construction of the hospital, at the site off Whitchurch Lane, will be funded by banks and other funders in a process similar to private finance initiatives and NHS Bristol will lease the building, initially on a 30 year contract. A financial backer has already been lined up and details are being finalised before everything can be signed off early next year.

The 60-bed community hospital was due to open by the end of this year, but with building work expected to take 24 months, the hospital is expected to be ready for patients in early 2012.

The 11,000 square feet building will be three stories high, and similar in size to the skills centre, which is taking place on the site.

The community hospital will bring healthcare services to the people of south Bristol, with diagnostic tests and day surgery on site.

There will also be wards for people who need to be kept in for treatment, dental services, day care assessments, outpatient appointments and therapy services as well as inpatient beds.

The walk-in minor injury and illness unit will move to the site from the Knowle West Health Park and there will also be an 8am to 8pm GP service in the building.

Some services from Bristol General will also move to the site, making way for University Hospitals Bristol NHS Foundation Trust to dispose of the building.

People in south Bristol have been campaigning for a hospital in the area for more than 60 years.

Lorraine Horgan, of Hartcliffe, has been involved in the project through her role with the Healthy Lifestyles Network for Hartcliffe and Withywood Community Partnership.

She said: "There has been campaigning for this hospital for more than 62 years, that's how long we have waited for it.

"I have been involved in committees looking at architects' plans, the colour, bricks and everything else. To see it actually taking shape is fantastic news."

David Waters, 78, chairman of the Brislington Community Partnership, said: "We are very pleased that after 62 years we are getting a hospital over this side of Bristol. We have had so many stops and starts over the last five years and started to believe it would never happen and this approval is a good thing."

Bristol City Council leader Barbara Janke said: "This is good news that's been a long time in coming.

"Now we want to see the hospital delivered so that local people can benefit. We need a comprehensive health facility for South Bristol to close the health inequalities gap which has divided the city for decades."

Project director Ben Bennett said that the Department of Health go-ahead was the final approval needed for the scheme and work will now move to the detail of the contracts.

He said: "It is what we have been waiting for. We have now got the authority to go ahead and sign the contract and there is no reason why that won't happen now.

"The NHS at the highest level has agreed that this scheme should happen and it is our jobs to deliver it. It is very exciting."

NHS Bristol chief executive Deborah Evans said: "It has been a long process and it is exciting that we can now move forwards.

"It is clear that this hospital marks real progress in transforming the way we can provide health care to people, particularly in the south of Bristol."

The community hospital will be developed by public private partnership Bristol Infracare LIFT, and will be built by Carillion.

Mark Nebel, chief executive of Bristol Infracare LIFT said: "With this final hurdle cleared, it is full speed ahead to pull together the various legal and commercial paperwork that will be required to seal the deal."

"We have already done the majority of this work in anticipation of this approval and we have been able to select the preferred bank for financing the project in the last few days."MP for Bristol South, Dawn Primarolo said: "This decision is great news. It means that the NHS in Bristol will finally deliver on its promise to provide people in south Bristol with the local hospital services for which they have campaigned for so long.

"Once contracts are signed in the new year we can look forward to seeing the building work begin and the dream will finally become a reality."