Birmingham Children's Hospital plans Edgbaston move
Birmingham Children's Hospital could move out of the city centre, under plans with Women's Hospital.
The proposals would see the two hospitals merge to form a single organisation on the Women's Hospital site in Edgbaston.
Work will now begin on an outline business case, due to be completed by the end of 2015.
The trusts said the project, which could cost £430m, would create the UK's first women's and children's hospital.
Sarah-Jane Marsh, chief executive of Birmingham Children's Hospital, said it would mean "better quality care for patients, better teaching and training for staff and more research opportunities".
She said the hospitals could share the same site from 2022, creating "something unique, not only in the NHS, but on a global scale".
Professor Ros Keeton, chief executive of Birmingham Women's Hospital Foundation Trust, said one of the benefits would be to "remove the need for the unnecessary transfer of tiny babies" away from their mothers to a separate hospital.
Both hospitals already work closely together and with the University of Birmingham and University Hospitals Birmingham.
The women's hospital is also a leading research centre, recently seeing "massive demand" for its genetics services.
It said co-location with the children's hospital would benefit those areas.
Despite proposals to share a site, the women's hospital said it also needed to press on with its own expansion plans, with it currently turning away about 500 mothers-to-be each year due to a lack of space.
Birmingham Children's Hospital opened as the Birmingham and Midland Free Hospital for Sick Children in 1862 and celebrated its 150th anniversary in 2012.
The hospital moved to a different site in Ladywood in 1917, but returned to its original location in Steelhouse Lane more than 80 years later.