The first patients should be treated at the centre in 2008

It will be built at St James's Hospital under a Private Finance Initiative (PFI) agreement between Leeds Teaching Hospitals and Catalyst Healthcare.

The building will have 300 beds and will replace a number of treatment centres spread across the city.

Work will start next month and should be completed by early 2008.

Car park

The site which has been chosen for the 11-storey building is between the Beckett and Chancellor wings.

A multi-storey car park with 1,300 spaces will be built nearby.

Catalyst Healthcare is a consortium of Bovis Lend Lease and the Royal Bank of Scotland which will be involved in the construction and operation of the building for the next 30 years.

Neil McKay, chief executive of Leeds Teaching Hospitals, said: "We aim to create a world-class facility that achieves the highest standards of design and quality of environment where the expertise that we already have can flourish."