The company, which rejoined the market in a $3.6 billion listing in July, was named on Wednesday as the preferred bidder for Sydney's Northern Beaches Hospital project, beating shortlisted rival Ramsay Health Care.

The 488-bed hospital in Frenchs Forest will treat privately insured and public patients. Healthscope and the government are expected to finalise a contract before the end of the year, ahead of construction starting next year. The hospital is slated to open in 2018.

NSW Premier Mike Baird said the total cost for the project would be $1 billion, with $400 million of that dedicated to road upgrades in the area.

Mr Cooke said the contract was "an opportunity for us to showcase our key performance indicators and most importantly clinical quality standards".

"This is the first [public private partnership] opportunity that has come up for many years and we believe that the many benefits in this model will see further projects along this line in Australia in the coming years," he said.

Public hospital projects slated for outsourcing to private operators include the Palmerston Regional Hospital in the Northern Territory, the proposed Royal Children's Hospital in Brisbane and a new cancer treatment centre in Melbourne.

The Northern Beaches bid is the first full-scale public private partnership opportunity Healthscope has won. Ramsay runs four public hospitals alongside its portfolio of 69 private hospitals.

Ramsay chief executive Chris Rex said the company's bid met "strict financial criteria" based on its experience of running public facilities.

"We have a successful record of only pursuing opportunities if strategic criteria and investment hurdles can be satisfied," Mr Rex said.

Asked if investors could be assured that Healthscope did not overpay in its bid, Mr Cooke said a number of his executives had been involved in similar projects when they were at Mayne Health.

"I am confident that this experience ... will reassure shareholders that the skill set required to successfully run a PPP and achieve shareholder returns exists in the business," he said.

The new facility will increase Healthscope's bed numbers by 8 per cent.

Public patient care at the new hospital will be funded by the state. Upon the completion of a 20-year contract, the hospital will revert to public ownership, although Healthscope will continue to deliver services from a portion of the facility to private patients for a further 20 years.

In its prospectus, Healthscope said the project comes with risks associated with greenfields sites, but these are mitigated by the transfer of acute services from two existing nearby hospitals to the new facility.

"This public work provides a base volume of business and revenue stream from the outset," the document said.

Healthscope shares rose 1.6 per cent to $2.50. They have not traded below the $2.10 listing price.

Healthscope is working with its partners, Thiess and BVN, to build the new hospital.