Sonic Healthcare Ltd. is to take over lab work currently done by Covenant Health, Alberta Health Services and Dynalife.
The $3-billion contract is part of a plan announced last year to privatize lab services.
Sonic says it expects the contract will generate at least $200 million a year in revenue.
Vickie Kaminski, CEO of Alberta Health Services, says Sonic offered the best lab services value for the money.
Elisabeth Ballermann of the Health Sciences Association of Alberta says the move is another example of the Tory government's aim to privatize health care.
"Alberta Health Services (AHS) didn't even bother to look at the option of maintaining public ownership of this critical piece of the health system," Ballermann said Friday in a release.
"Sonic currently has no operations at all in Canada, which leaves us with far more questions than answers. We firmly believe that this new lab could be built and operated for less with public money."
Ballermann's group represents about 24,000 health-care employees, including about 1,500 laboratory workers who currently work for Dynalife, AHS and Covenant Health.
NDP health critic David Eggen says Premier Jim Prentice and his new health minister, former Edmonton mayor Stephen Mandel, don't yet have a seat in the legislature, yet "already they are presiding over the largest privatization contract in Alberta's history."
Last October, the New Democrats released a letter signed by 16 pathologists that said they were concerned about the impact of lab privatization on patient safety.
"This decision to move ahead with this plan has serious implications for patient safety, the speed and delivery of lab results, workloads for health-care workers and protocol in the event of a natural disaster," said Eggen.
Alberta Health Services says about 27 million lab tests are conducted annually in Edmonton.
Prentice in Calgary and Mandel in Edmonton are running in byelections Oct. 24.