A further £120 million for future phases of the campus redevelopment has also been confirmed.

Work is due to start on-site in November and will include a new state-of-the-art facility providing services for the adult acute mental health inpatient service, older people’s mental health assessment, Intensive Psychiatric Care Service (IPCU) and the new Robert Fergusson national brain injury unit.

David Small, chair of the Royal Edinburgh Hospital Project Board, NHS Lothian, said: “To have reached this point in the project is extremely pleasing. To think that work will soon start is exciting and is the culmination of much hard work and effort on the part of staff, patients and the team involved with the project.

“We expect construction of the £48m first phase to start later this month and so the timing of this announcement of further funding could not have been better.

“This will now allow us to bring together phases two, three and four of the project and will mean that these works should be completed sooner than we had initially anticipated.

“Throughout this project we have listened to what matters to people and are confident that the new buildings will deliver an excellent mental health facility that will open a new chapter in the hospital’s proud 200 year history.”

Health secretary Alex Neil said: “This first phase of work at the Royal Edinburgh Hospital will deliver an excellent mental health facility that will open a new chapter in the hospital’s proud 200 year history.

“With full business case approval now granted, work will soon get underway on this exciting phase of the project. The new facilities will ensure that patients can benefit from modern, fit for purpose facilities, whilst also benefitting the local community through investment in the area.

“Our recent announcement of an additional £400m programme of health investments includes a further £120m of investment at the Royal Edinburgh Hospital that will see the completion of the site’s redevelopment. The new campus, which is part of the Scottish Government’s £1.15 billion revenue financed investment in health infrastructure across Scotland, will also see efficient use of energy, water and waste management to reduce costs and carbon emissions.”

The redevelopment of the hospital site will be undertaken in partnership with Hub South East Scotland Ltd who have appointed Morrison Construction as the preferred phase one contractor.

Paul McGirk, chief executive of Hub South East Scotland said: “We’ve been involved in this project from the beginning, so it’s exciting to reach this major milestone and know that work will soon be able to start on construction to make these plans a reality.

“We look forward to continuing our successful partnership with NHS Lothian to ensure that patients will benefit from modern, fit for purpose facilities and the community will benefit from investment in the local area.”

The Royal Edinburgh Hospital provides acute psychiatric and mental health services, including treatment for learning disabilities and dementia.

The redevelopment of the campus is planned to be undertaken in phased stages, beginning with phase one. The projected timescale for completion of phase one is Autumn 2016.