West Suffolk Hospital has received £ 13.4 million to redevelop its emergency department.
The funding will be used to improve and modernize the department, separate ambulance arrivals from other patients needing major and minor services and reduce the turnaround time for outpatient services.
Dr Stephen Dunn, chief executive of the West Suffolk NHS Foundation Trust, said it was a 'much welcomed early Christmas present for patients and staff'.
The funding was announced by Matt Hancock, Secretary of State for Health and Social Care & MP for West Suffolk, along with more than £ 18 million to the East of England Ambulance Service NHS Trust to improve or replace some of its outdated bases.
Dr Dunn said, "This is fantastic news and much needed for our patients and staff. The current estate occupies no longer fit for purpose.
"This money will help us improve our experience for patients, create a better working environment for our staff and help us avoid patients waiting longer than they need to."
Dr Dunn added: "I would like to say thank you for your gratitude for continuing to work with us on our exciting plans."
Mr Hancock, said: "NHS facilities and world-class care in world-class NHS facilities make this billion-pound boost, which means the NHS can do just that years to come.
"The new funding for Suffolk and the East of England wants to ensure local residents receive the best emergency care."
Jo Churchill, MP for Bury St Edmunds, said: "I have been campaigning for three years for a new emergency department, working closely with the hospital's chief executive Stephen Dunn.
"This money is going to be a huge benefit to patients and staff and I can not wait to get on with the build. Along with the new acute and cardiac units this will see our hospital 'future fit' to continue its outstanding care. "
Nick Hulme, head of the Suffolk and East Essex Essex Shadow Integrated Care System, said: "I would like to thank you for securing the money. These were received very favorable feedback.
"This is a statement on our system, our plans and our work."