A Roscommon-Galway TD is welcoming the news.
A new 50 bed unit at Portiuncula Hospital in Ballinasloe is expected to be completed by 2022.
Health Minister Simon Harris made the announcement saying that the development is now ready for public tender.
Roscommon-Galway TD Eugene Murphy says Minister Harris is due to visit the hospital in October.
He says the current facility has serious problems: