A £2.6m refurbishment will ensure that Blairgowrie Community Hospital is capable of providing 21st Century care.
Work to enhance facilities has begun and will lead to the creation of a purpose-built inpatient GP unit.
The investment should allay some concerns about the future of the hospital, which in 2011 led to a public campaign and petition about the dilution of services.
Though dementia services have been reduced, NHS Tayside always stressed that the hospital had an important role to play in local health care and hopes the overhaul will boost its offering.
The new GP unit will offer both single and twin en-suite rooms, with the increase in single rooms helping to accommodate the needs of palliative patients.
There will be a new physiotherapy and occupational therapy rehabilitation area, as well as a new minor injury and illness unit, which will give clinicians scope to deliver new treatments locally.
The refurbishment work is expected to last around six months and, when complete, the vacant space in the current GP unit will be used to provide outpatient clinics and accommodation for community outreach services.
There will also be space for more community activities and the Strathmore Advisory Group will be involved in investigating how this area can best be used.
NHS Tayside vice-chairman Linda Dunion and Perth and Kinross Community Health Partnership general manager Bill Nicoll visited the hospital to mark the start of the project.
Ms Dunion said: “I’m delighted to see work beginning on this fantastic new unit in Blairgowrie Community Hospital.
“This project is the latest investment from NHS Tayside in providing state-of-the-art facilities and improving health services for people in Tayside.”
Mr Nicoll said the work was “an important milestone” in the redevelopment of local health services in Strathmore.
He said: “The refurbishment marks a further improvement in the care available locally. It will be building on the successful dementia care service to provide modern, fit-for-purpose facilities that will accommodate the changing needs of our population.”
The investment in Blairgowrie Community Hospital is just one part of a major overhaul of services across NHS Tayside’s facilities.
It will see the upgrade of the critical care unit at Ninewells Hospital, together with spending on neonatal intensive care, new health mental health and dental facilities, theatre maintenance and an improved coronary care unit.
The overall spending will run into tens of millions of pounds with the health board confident of securing the funding needed.