The preparatory committee decided to start building a hospital with 325 beds in Fossvogsdalur.

As a result, various health institutions that had been run by the city moved there, such as the accident ward and laboratory that were previously in the Health Protection Center, the psychiatric ward that was previously in the Epidemic House and the hospital operation that Hvítabandið had run at Skólavörðustígur .

In 1973, the hospital received a large building in the vicinity that was used for rehabilitation and was named Grensásdeild.

Various other branches have been operated outside the main building over the years, such as maternity homes, long-term accommodation for the mentally ill and the geriatric ward.

The construction was finished in 1983 and officially opened by Davíð Oddsson 22 June the same year.