A $24 million hospital and physicians' clinic will be built to serve residents of Falls City and Richardson County.
Officials estimate it will serve about 9,500 residents of the area.
Funding is provided by the U.S. Department of Agriculture, Stillwater National Bank and the Community Medical Center in Falls City.
The 68,000 square-foot hospital will initially have 24 beds and include a 6,500 square foot physicians' clinic.
Ryan Larsen, CEO of the Community Medical Center, said the old hospital served the area well for 90 years and that he expects the new hospital to last for a similar length of time.