Chatham-Kent Health Alliance has received a $7.3-million provincial grant.
The funding will go towards the construction of a new power plant to replace aging equipment with new boilers, generators and electrical equipment at the Wallaceburg site.
The replacement power plant project costs an estimated $8 million.
The balance of the project cost will be funded through hospital funds.
Construction should be complete sometime in 2019 with minimal disruption to patient services, officials said.