Originally established to provide rehabilitation and care for injured soldiers returning from World War II, QE currently provides a range of holistic healthcare services focusing on rehabilitation therapy, clinical spa treatments, appearance medicine and in-patient programmes.
It also offers student and intern placements for health specialists and is involved with various research projects.
"QE Health has been a part of Rotorua for more than 75 years and we now have certainty we can continue to support the community long into the future."
The facility is expected to be open by the end of 2021.
The construction period will see between 30 and 50 people employed.
The project received funding support from the Government's Provincial Growth Fund and Rotorua Energy Charitable Trust, to ensure continued high-quality health services in the city.
The project has also benefited from the support of the landowner, Pukeroa Oruawhata Trust, which has allowed QE Health to remain as a tenant on the land.
Hawkins central general manager Peter McCawe said this was one of several projects that Hawkins was involved with in Rotorua.
"The Hawkins team are thrilled to be working with QE Health on this project.
"Many of our team live in Rotorua and so it's a real pleasure to be part of redeveloping this local facility, which holds so much history."
Rotorua Trust had earlier this month committed a $1 million grant to the project, along with a loan of $2 million. The Trust had also agreed to underwriting of a further $2 million should additional funding partners not be secured.
The Provincial Growth Fund this month announced a grant of $1.5 million, in addition to the $8 million, as a loan, earlier this year.
Rotorua Trust manager Tony Gill said QE played an important role in Rotorua and beyond, providing quality clinical and rehabilitation services, while also creating jobs.
"QE has played an important role in Rotorua's past and we believe it will play an even bigger part in the city's future, which is why the Trust made the decision to support the rebuild."