It will add 26 thousand square feet to the facility and enhance outpatient and primary care services.
The 25 bed critical access hospital serves 21-thousand people in Madras and the surrounding communities.
The renovation will improve the hospital's current small laboratory, will expand the number of beds in the Emergency Department and the number of operating rooms.
The work is slated for construction in May of 2015.
The 16 million dollars for the project will be partially financed by bonds and fulfills the hospital's commitment to the Madras community to upgrade the hospital.