Health Minister, Edwina Hart, has approved the outline business case from Abertawe Bro Morgannwg University Health Board.
The hospital has already benefited from over £25m Assembly Government funding to build a new multi-storey car park and to improve access roads and walkways.
The development will include the replacement of the 1940s buildings on the Morriston site.
A critical part of the new development will be the new Outpatients’ Department, incorporating space on both the ground and first floors of the new build, totaling nearly 3,400 sq m.
Paul Stauber, ABM Director of Planning said: “This is a massive investment in Morriston Hospital which will enable us to demolish old buildings which have been around since the1940s, and move services to fantastic, modern facilities.
In producing the final business case for the scheme, ABM will also further develop its plans for the redevelopment of A&E department, which is estimated to cost £3m.