The Nelson Local Care Centre, being built for South West London Health Partnership, will replace the existing Nelson Hospital.
The contract was awarded by Fulcrum LIFTCo, on behalf of the health authority.
The three-storey building will house two GP clinics, a café, a pharmacy and associated office accommodation.
The building will be BREEAM (Health) Excellent rated and will contain sustainable features including photovoltaic panels. The design received input from clinicians, Borough of Merton planners as well as local residents.
Delivered across two phases, the project will involve the demolition of the existing hospital, ranging in age from Edwardian when the hospital opened in 1911 through to the 1990s, with the retention of three areas of Pavilion Block façade and a remodelling of a section of public highway known as The Rush.
Rydon Construction managing director Mark Mitchener said: “This is an exciting opportunity for Rydon to demonstrate our expertise in the healthcare sector to Fulcrum and South West London Health Partnerships. We look forward to handing over a community hub for the delivery of 21st century local GP and outpatient services.”