The new national children's hospital at St James's Hospital in Dublin is expected to cost more than 484 million euro and open as late as spring 2018.
The 6.3 hectare development on the south city was agreed by Government as an alternative for the rejected Mater hospital location in the north of the capital.
Health Minister Dr James Reilly said construction is expected to be completed over the next five years, by the end of 2017 or into the early part of 2018.
"The reality is that the planning risk at the Mater is just too high - the cramped size of the site," he said.
Some 200m euro from national lottery funds will be used in the children's hospital construction budget.
Another 39m euro has already been spent on rejected plans for the Mater site with 26m euro not able to be recovered.
But Dr Reilly suggested that there are concerns that development of the St James's site will be above the previous estimate of 484m euro.
"We think that's too tight. There are other costs which need to be put into that," he said.