Kevin Smith makes the proposal in an interim report released Thursday on how to improve health-care delivery in the region.
The 51-page report calls for existing hospitals in Port Colborne, Fort Erie, Niagara Falls and Welland to be shut down.
Smith did not say where the new hospital should go — leaving that question to the mayors of South Niagara communities.
They'd also have to figure out where to put a separate, free-standing urgent care centre.
Smith says a consolidated model makes economic sense and is cheaper than the status quo.
He says it's estimated the new hospital in the south would cost $850 million over 30 years, compared to $1.1 billion to keep the existing sites running.
Smith was named supervisor of the troubled Niagara system last August following a C. difficile outbreak and other problems at Niagara-area hospitals.
He says he released an interim report in order to get "constructive feedback" from all those affected inside and outside the system.
Community leaders are encouraged to provide their comments and suggestions in writing or by email before June 15. A professional polling firm will also be used to gauge community reaction.
Smith's final report is expected to be in Health Minister Deb Matthews' hands by June 30.
The multi-site health system serves 434,000 people with hospitals in Niagara Falls, St. Catharines, Welland, Fort Erie, Niagara-on-the-Lake and Port Colborne.
Smith also recommended, among other things, that a new "skills-based" board of directors be appointed for the system and that a nurse-practitioners' walk-in clinic in Niagara-on-the-Lake be relocated.
Building a new hospital in the south is "more important than ever" Smith said in the report, adding it should complement a new facility currently under construction in St. Catharines, in the north part of the region.
Smith's report drew immediate criticism Thursday from opposition critics, including Progressive Conservative Leader Tim Hudak who represents the Niagara West-Glanbrook riding.
"For nine years, people — medical professionals, municipal leaders and families in Niagara — have been neglected by the current government and seen emergency rooms at Fort Erie and Port Colborne close."
"Niagara residents have lost all confidence in the NHS — which has become a complete mess," Hudak said, adding there should be input from the community before any decisions are made.
Cindy Forster, the NDP member who represents Welland, also said further consultation is needed.
"Families in Niagara have been increasingly frustrated with health care in their communities," she said.
(The Canadian Press, CKTB)