A shake-up of the HSE will see University Hospital Waterford becoming the primary acute hospital in the South East.
Six new regional boards are being created to devolve more decision making power to local staff.
UHW will no longer be part of the Cork dominated South/South West Hospital group and will instead develop a partnership with St Vincent's in Dublin.
Area C includes Waterford, Wexford, Carlow, Kilkenny and South Tipperary as well as parts of Wicklow and South Dublin.
University Hospital Waterford and St Vincents will be the Model 4 Acute hospitals in the grouping which will cater for 900,000 people.
Minister for Health Simon Harris said: "This will result in clear financial and performance accountability, empower frontline staff and devolve authority from the HSE to the local regions.
"These proposals will help shape the future of healthcare in this country and will give the staff, and more importantly, communities a greater role in the delivery of health."
Waterford Minister of State John Halligan has welcomed the move.
"I support the series of reforms outlined in the Sláintecare programme. In it, we see a firm commitment to de-centralise health service provision, as well as a guarantee of fairer, more equitable, resource allocation.
"University Hospital Waterford will become the main Model 4 Acute Hospital catering for the people of the South East region while developing an important partnership with St. Vincent's Hospital in Dublin.
"For too long UHW was the poor relation in what was clearly a dysfunctional South/South West hospital grouping. The reform programme approved by Government today places Waterford at the heart of a new South-East based grouping and will provide UHW with greater autonomy and opportunities for development.
"I have long expressed the view that the previous decision to link UHW with Cork University Hospital had a detrimental effect on healthcare provision in the region, and I am delighted today to see that failed decision reversed.
"Since entering Government I have fought tirelessly for proper, equitable healthcare provision for the people of the South East region and I will continue to do so. Today's decision marks a new dawn for healthcare in Waterford and the whole South East region and I welcome it warmly."
The proposed regional health bodies will have their own budget based on the local population needs which will improve accountability and transparency across the sector. #Sláintecare pic.twitter.com/jo1Z96VZm7
— MerrionStreet.ie (@merrionstreet) July 17, 2019
