Building work is due to start on a new primary school being constructed on the former hospital site on Thorpe Road, Peterborough.
The new building will allow West Town Primary Academy to relocate and expand from its existing site on Williamson Avenue.
The new school building will open in 2016 and provide places for 630 pupils - double the number at the existing site.
The £6 million project is part of the Government’s Priority Schools Building Programme. The building works are being carried out by Kier Construction for the project director, the Education Funding Agency.
The council will be contributing £500,000 to help finance the cost of the school build and around £1.5 million towards associated works around the completion of the school.
These associated works include ensuring that the historic Memorial Hall is maintained as a lasting memorial, and that the new school can also be used as a modern community hub.
Councillor John Holdich, leader of the council and cabinet member for education, skills and university, said: "The funding we are receiving from the Government to allow this project to take place is extremely welcome as we work to improve all our current school buildings and look to construct others to cater for the increase in population in Peterborough.
“We are also investing in the project and I am really pleased that the new building will form a key part of the re-development of the former hospital site, with more housing close to the city centre and the retention and restoration of the iconic Memorial Hospital.”
The new building is designed to be an open, easily visible site with specific zoned areas both indoors and out, to ensure children have secure and personalised areas.
West Town Primary Academy is part of the Cambridge Meridian Academies Trust.
Principal Jane Dooley, said: “We are all really excited by the prospect of the fabulous learning environment the new school offers; it will enable West Town Primary Academy pupils to thrive inside and outside of the classroom.
“The new building is going to be great for this revitalised area of the city centre and will open up many opportunities for pupils, teachers and the whole community.”
Mark Jude, preconstruction director for Kier Construction Eastern, said: "Getting to this stage of the project is a great achievement and is a fantastic example of what can be accomplished through hard work, strong working relationships and the will of all involved.
"We look forward to continuing working closely with Peterborough City Council, the Education Funding Agency and the Academy’s staff and governors to deliver this new school for West Town and the wider community.”