The money will be used to create a Combined Emergency Assessment Unit, which will help staff assess patients more quickly and make sure they get the right type of treatment sooner.
Part of a successful £88.5 million bid submitted through the Humber, Coast and Vale Health and Care Partnership, it will take investment in buildings and infrastructure at Scarborough Hospital to more than £80 million since 2012.
NHS Scarborough and Ryedale CCG Chairman, Dr Phil Garnett, said: “This is fantastic news for hospital services in Scarborough and should be loudly welcomed by patients.
“The money will be used to create a first-class assessment centre at Scarborough Hospital and demonstrates the commitment of York Teaching Hospital NHS Foundation Trust to maintaining and improving services for patients in the town and surrounding area.
“Importantly, we also believe it will make Scarborough Hospital a much more attractive place to work and will help tackle some of the retention and recruitment difficulties faced by the Trust in recent years.”
Mike Proctor, Chief Executive of York Teaching Hospital NHS Foundation Trust, said: “This is the news we’ve been waiting for and is fantastic for both patients and staff, signalling our commitment to investing in Scarborough Hospital.
"This much-needed development means we can improve and streamline how patients are assessed, admitted and treated, which should reduce the time that people wait in the department and ultimately improve patient safety.”