Gov. Doug Ducey has signed legislation allowing parts of the state mental hospital in Phoenix and its 93-acre grounds to be leased to private providers.
Wednesday's signature on House Bill 2043 came after it passed the House unanimously and garnered just two no votes in the Senate.
Department of Health Services Director Cara Christ told lawmakers on the House Health Committee in January that her department wants to build a Center for Psychiatric Excellence on hospital grounds.
The private-public partnerships could include outpatient behavioral health services, urgent psychiatric and an emergency room, 24-hour holds for observation and stabilization and rooms for short stays for adult inpatient acute psychiatric services.
Private providers could bid to use empty hospital wards, renovate and use vacant buildings or build new facilities.