Labour is matching National's promise of a new hospital for Dunedin - but it will be built from public funds.
Last week National leader Bill English visited the city, and pledged to rebuild the facility for $1.4 billlion within 7-10 years.
He said National would look at co-funding the project with the private sector and was greeted at the hospital by protesters, rallying against health care cuts.
Labour leader Jacinda Ardern says her party would build a new hospital without using PPP (public private partnership) - and says they would relocate it to the city centre.
The construction - also with a $1.4 billion price tag - would begin within a first term of Government.
Ms Ardern says PPP projects have a "disastrous record" in the UK, where they are commonplace.
She quoted London mayor Sadiq Khan who has condemned them as a "millstone around the neck of the English capital's health system".
Ms Ardern said Southern DHB has been chronically underfunded by the Government. She said tendering and agreeing on a contract would "only slow the construction process down".
And it would ultimately lump more costs onto the taxpayer because the contract would have to return a profit to private investors.
"There is enough money in the Government's capital spending allowance to build the hospital without a PPP."
She said the project is "long overdue" for Otago.
"The hospital at present is dangerous and unsafe for staff and patients. Most of the existing buildings would not survive a severe earthquake."