Redevelopment of the existing Royal Adelaide Hospital site will generate more than $1 billion in private investment and sustain 1000 construction jobs for more than a decade, the South Australian government says.
The government has revealed its plans for the site which will take up to 15 years to fully transform.
It includes handing back almost one third of the seven hectares to parklands as well as developing residential buildings alongside culture and university precincts.
Once completed, more than 9300 people a day will work, visit or live the site.
"This precinct will be an economic driver, reflecting South Australia's transitioning economy and developing new industries which will result in thousands of new jobs," Infrastructure Minister Stephen Mullighan said.
"It will breathe new life into the city's East End, with a mixed-use precinct which not only opens the site to the public and reclaims precious land, but also fosters innovation and healthy living while generating billions of dollars in valuable economic activity."
The government will contribute $200 million, mainly for demolition and remediation with work on the site to start once the hospitals' operations are transferred to the new Royal Adelaide which is expected to open some time in 2017.
The government will now enter into negotiations with the preferred bidders, a consortium involving the South Australian property group Commercial & General and infrastructure and property company John Holland.
The group's plan also allows for an open plaza, a series of laneways and for a new entrance for the Botanic Gardens along with increasing the size of the Botanic Gardens lake.
Premier Jay Weatherill said the plan was a win for those who had advocated for a large amount of the site to be returned as open space.
"The old Royal Adelaide Hospital site is one of Adelaide's most prominent locations and provides a rare opportunity to transform and enhance the city's East End for the benefit of all South Australians," he said.