Otley has emerged as the chosen site for a new Wharfedale Hospital.
After a year-long public consultation, health chiefs in Leeds have chosen the Garnett's Mill site off Pool Road as the best place for a new hospital ahead of other identified sites - High Royds at Menston and the present site at Newall Carr Road.
A team of representatives from Leeds Teaching Hospitals NHS Trust, the Leeds Health Authority, Leeds Community Health Council and the Northern and Yorkshire regional office of the NHS Executive has spent the last few months setting a list of requirements to each of the sites.
And now, it has come up with the Garnett's site as the one which best fulfilled all the requirements - including accessibility to public transport and local support.
Mike Ramsden, chief executive of Leeds Health Authority, said further consultation with the public would now take place to make sure any important facts had not been overlooked.
"Having completed the process of site option appraisal, which took into account the key issues identified in the consultation, we are now sharing information about the sites.
"We are seeking views on whether any significant facts have been overlooked or omitted and whether any additional facts should be taken into account."
Mr Ramsden said he hoped as many people who took part in the original consultation would want to continue to have their say.
"I hope they will now take the opportunity to consider this latest piece of work and its recommendation and write to us with any comments by June 25," added Mr Ramsden.
Harold Best (Lab, North West) said it was wonderful news for Otley and a direct result of the town council campaign led by its former leader, Councillor Sue Egan.
"The town council, which she led, recognised that keeping the hospital in Otley was a top priority for the town. They identified the Garnett's site, they collected a 10,000-signature petition, they went to see the Secretary of State for Health, Frank Dobson, and they involved the whole of the community, including myself, in the campaign," said Mr Best.
Mr Best said: "I have no doubt that without their campaign, Otley would not have its hospital, and more than probably, there would be no plans to replace Wharfedale Hospital at all.
"This is great news for Otley. It provides healthcare in the community where it is wanted, and it safeguards 550 jobs on the hospital site and many more jobs in the shops and service industries of the town."
In a joint statement, Otley's Town Mayor, Councillor John Eveleigh (Lab), and Coun Phil Coyne paid tribute to Mr Best and to Mrs Egan.
"It is gratifying to see all the hard work succeeding in this recommendation, but we wish to to emphasise the key role played by our MP Harold Best.
"It was Harold who arranged our meeting with Frank Dobson, Harold who spent hours in meetings with Ministers, the hospital trust, the local and regional health authorities and Garnett's management, and Harold who enthusiastically backed our campaign from the start."
Councillor Colin Campbell (Lib Dem) said it was the first time in his many years of hospital campaigning that he had cause to feel confident.
"It is the first time in the 20 years that I have been involved in the campaign about the hospital that I feel optimistic. It is a good result for everybody in Otley who has kept faith with the hospital and has continued to campaign for its retention.
"It has taken a long time, but we are 75 per cent of the way there now and I look forward to an early start on site and an early completion."
Sylvia Reid, from Otley Town Partnership, added it was encouraging news for businesses in the town.
She said: "Keeping the hospital in Otley was one of the key priorities identified by the partnership for revitalising the town.
"The hospital will generate something like 60,000 patient visits per year, and then there are all the staff at the hospital. Together they form a large group of potential customers, which the town well needs."
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