The project forms one section of a £25m investment programme and is part of the trust’s plan to consolidate its pathology services with Public Health England as part of the creation of Severn Pathology.
Work on the £11.7m contract will begin imminently, with completion set for January 2015.
The four storey building will be constructed on land to the west of the existing phase one pathology unit. A link bridge will then connect the two phases.
Facilities will include cellular pathology laboratories, microbiology laboratories and a neuropathology suite, as well as administration offices and a regional cytology training suite.
As part of the scheme, molecular laboratories will be relocated from the phase one building which will then allow the overall campus regeneration to continue.
Construction Director Martin Thomas said: “This development will enable Southmead Hospital to be recognised as one of the leading pathology services in the UK. Our goal is to create a high quality facility which will be built to BREEAM Excellent standard.”