President Bush helped break ground at what will be the new Walter Reed National Military Medical Center.
The ceremony took place Thursday at Bethesda Naval Hospital, which will consolidate under the new name once construction is complete.
The nearly one-billion dollar project will combine the resources of the army, navy and air force to make it easier to treat wounded veterans.
It is scheduled to be completed by 2011. The 6.7 million-square-feet facility will have 345 beds.
"At this new center, wounds will be healed. Medical knowledge will be advanced. Lives will be rebuilt, and those who wear our nation's uniform will be reminded that they have the enduring gratitude of the American people," Bush said.
Walter Reed 's current location, just five miles down the road in Washington, was scheduled to close even before reports exposed deteriorating conditions at the army hospital.
Building 18 of the facility contained moldy walls, rodents and other problems..