The Western Health & Social Care Trust will now work with the Northern Ireland Health Group, a private sector consortium, to build the facility.
Making the announcement the Health Minister Michael McGimpsey said: "The new acute hospital will provide the people of the South West with a modern, state-of-the-art healthcare facility that will be fit for the 21st Century.
"I am delighted to see the project progress to this key stage. The appointment of the Northern Ireland Health Group means that the new hospital is very much on schedule for 2012."
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Chairman of the Western Trust, Gerard Guckian, said: "This is tremendous news. It marks a very important milestone on the journey of improving health and social care for the 290,000 people living in the Western Trust area.
"When completed, this new state-of-the-art hospital will be one of the most modern facilities, not only in Northern Ireland, but across the UK. It is a flagship project and I am delighted to see the delivery of such a facility in the Western Trust area.
"Our expectations are high and I have no doubt that Northern Ireland Health Group will deliver a 21st Century hospital that is in keeping with our expectations. I would also like to pay tribute to the two unsuccessful bidders who have participated positively in the process."
Construction of the new £267 million hospital is expected to begin on site next year, with planned completion in 2012.
The hospital will have 315 beds and will provide a wide range of in-patient, outpatient and day case services including, accident & emergency, diagnostic services, observation and assessment unit, elective/planned surgery and acute medical/surgical services.
(PR/JM)
