Construction work at the project was halted earlier this year when main contractor Carillion collapsed into liquidation.
With Sandwell and West Birmingham NHS Trust having now secured funding to deliver the scheme, the new hospital will be completed by 2022.
Health Minister Stephen Barclay said: "Our long-term plan for the NHS will see it receive £20.5 billion a year more than it currently does by 2023, but our commitment does not stop there, as this important partnership shows.
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"We are not only giving patients in Sandwell and west Birmingham world-class NHS facilities on their doorstep, but also showing our determination to build an NHS fit for the future – all whilst making sure taxpayers' money is spent in the best possible way."
Sandwell and West Birmingham NHS Trust Chief Executive, Toby Lewis, said: "This is absolutely fantastic news. After a huge amount of work by teams across Whitehall and the Trust, and with the voices of local residents, clinicians, and stakeholders having been clearly heard, we are delighted that we now have a definitive, publicly financed plan.
"We will continue to engage with the construction market over coming weeks and build towards a formal procurement by November this year."
Once finished, Midland Metropolitan will feature state-of-the-art diagnostic equipment, 15 operating theatres and 669 beds.
In addition, it will be an acute centre for the care of adults and children, as well as offering maternity care and specialised surgery to approximately 750,000 residents.
(LM/MH)
