The St. Charles Health System board of directors on Friday approved the construction of a new hospital in Prineville.

The board also chose a site, 20 acres on the old Ochoco Lumber site on Southeast Combs Flat Road, according to a health system announcement.

Board approval was the final step in a process begun in April with a vote by the Pioneer Memorial Hospital membership to curtail the lease of Pioneer Memorial to St. Charles and sell the building and other assets.

The new hospital is expected to cost $30 million; construction could start late this year or early 2014.

The next step is selection of a firm to design and build the new hospital, which is scheduled to open in spring 2015. The board gave that task to the health system management along with its approval Friday, according to hospital spokeswoman Kayley Mendenhall.

Bob Gomes, the CEO of Pioneer Memorial Hospital and St. Charles Redmond, said that selection should come in the next two months. He declined to identify the two firms chosen as finalists from seven that submitted proposals. He said both provided conceptual drawings of a new hospital.

The new hospital will include inpatient beds, an emergency department, surgical suites, imaging services, laboratory services, physician clinic space and other features, according to Mendenhall.

“The investment in new facilities and innovative services will lead to a healthier community consistent with our new vision for health services in the region,” Mendenhall quoted James Diegel, president and CEO of St. Charles Health System, as saying.

Once the Pioneer Memorial membership disposes of its assets, about $1 million worth, it will go out of existence, Gomes said. Some of the money will go toward the cost of building the new hospital, some will go into a scholarship fund for Crook County students interested in medicine.

“Our fiduciary responsibility as a board wasn’t to keep the current building; it was to make sure everybody in this community had access to good, quality health care. And that’s what we’ve done,” the health system quoted Dan Schuette, president of the Pioneer Memorial Hospital board and vice chair of the St. Charles Health System board, as saying. “Prineville has an opportunity to be innovative and cutting edge beyond what the rest of the United States is doing and I’m real proud of that.”

In addition to operating the Prineville hospital, St. Charles Medical System, a nonprofit corporation, owns and operates hospitals in Bend, Madras and Redmond.