The Saskatchewan government is committing more than $300 million toward an expansion and renovations for Prince Albert's Victoria Hospital.

The government said it will build a new multi-storey addition for the facility including an acute care tower and replacing the existing adult mental health space.

Nearly 70 new beds will be added, an increase of 40 per cent. Other new additions include a larger emergency department, a helipad and an MRI.

"We are moving forward to address the health care needs of our growing population in Prince Albert and the north," Premier Scott Moe said in a statement.

WATCH: Premier Scott Moe spoke in Prince Albert Friday:

The government is covering 100 per cent of the capital costs, with furniture and equipment costs covered by the Victoria Hospital Foundation.

"This significant investment reflects the importance of Victoria Hospital in providing a wide variety of health services not only to people in Prince Albert, but to patients and clients across northern Saskatchewan."

The Saskatchewan government will build a multi-storey addition to Prince Albert's Victoria Hospital at a cost of more than $300 million. (Chanss Lagaden/CBC)

During Friday morning's news conference to announce the expansion, Moe praised the "passionate advocacy" by local leadership, especially Prince Albert Mayor Gregg Dionne.

"Never in my recent memory has a meeting gone by where Mayor Dionne and I sat down and he did not advocate for a new and expanded hospital," Moe said.

"Not once."

Moe said local health care professionals and families, as well as the Indigenous community, are being consulted on the hospital's design and their needs.

"A new and expanded Victoria Hospital will be a health care facility that will be planned for the community," he said. "And it will be planned for by the community."

On Wednesday, Health Minister Jim Reiter said the population had outgrown the current hospital.

Victoria Hospital was built in 1969. The city's second hospital Holy Family was closed in 1997.

Mayor and local leaders welcome the expansion

Mayor of Prince Albert Greg Dionne had been advocating for a new hospital for the city for a few years.

"Prince Albert is a major hub of essential health care services for the North Central region of Saskatchewan," Dionne said in a statement.

"Victoria Hospital is an aging facility. We welcome new funds that will improve our capacity to respond to the health care needs of our residents."

PAGC Grand Chief Brian Hardlotte said in a statement that the 12 First Nations, "will be comfortable, culturally inviting and culturally responsive to the needs of all First Nation membership and communities."

"This will be a hospital First Nations will have pride of ownership in because of our considerable involvement with the Government of Saskatchewan, helping create a hospital that is truly healing for all," Hardlotte said.

Local MLA Joe Hargrave said the government would be working with Indigenous leaders to make sure "culturally appropriate services and spaces are part of this project."

Citing Saskatchewan Hospital, NDP raise concerns

While they agree building a new hospital in Prince Albert is important, the provincial NDP raised concerns about how the hospital may be built.

The Saskatchewan Hospital in North Battleford was built through a public private partnership.

Opposition Leader Ryan Meili said that building has had numerous issues since it opened, including a recent water flush that has since rendered water unusable in the building.

"Due to the water flushing activity, a pipe connection cap in a basement wall became dislodged shortly after flushing began," a statement from the government said.

"The flush was immediately stopped and clean up began. No patient areas were affected."

An internal memo provided by the NDP said a full boil-water advisory is in place and patients are not to drink or ingest any water from the facility.

Meili said the issues at the Saskatchewan Hospital are relevant to Friday's announcement.

"From all appearances it looks like they're going down that same P3 model," Meili said. "We're going to wind up with another project built by an out-of-province company."

An email from the province said no decision has been made as to how the Victoria Hospital expansion would be completed.