Plans by two healthcare organizations to open a new hospital in Tacoma in two years have been approved by state regulators.

The state Department of Health granted a Certificate of Need in July for Kindred Healthcare Inc. and CHI Franciscan Health to build and operate a 60-bed inpatient rehabilitation hospital. The state action is a significant regulatory step for the project, officials said.

The new hospital, to be built at 815 S. Vassault St., will care for adults recovering from strokes, neurological disease, brain or spinal cord injuries, and other long-term illnesses or injuries. The new facility will relocate CHI Franciscan’s inpatient rehabilitation services that are currently offered at St. Joseph Medical Center in Tacoma.

Kindred will manage the day-to-day operations of the new hospital, which is tentatively scheduled to open in early 2018.

CHI Franciscan already operates eight hospitals and about 100 primary and specialty-care clinics in three counties.

The joint project with Kindred is “a tipping point in Pierce County” for long-term rehabilitation care, said Ketul Patel, CHI Franciscan’s chief executive officer. “Our partnership with Kindred is a giant step toward meeting that critical need. This is important in terms of partnering with a leading provider of post-acute care services to join with our full continuum of health care services, to provide our communities with the right care where and when they need it.”

Benjamin Breier, Kindred’s president, said his Kentucky-based company’s “collaborative efforts” with health systems like CHI Franciscan “deliver the best in patient care and have helped our inpatient rehabilitation business outperform peers in key clinical measures.”

In the Seattle market, Kindred operates two transitional care hospitals, two nursing centers, and two co-located hospital-based sub-acute units. Nationally, the company has 102,000 employees at facilities in 46 states.

CHI Franciscan is affiliated with Catholic Health Initiatives, the third-largest non-profit health system with operations in 19 states.

Based in Tacoma, CHI Frnciscan has hospitals in Pierce County (St. Anthony in Gig Harbor, St. Joseph in Tacoma and St. Clare in Lakewood), in King County (St. Elizabeth in Enumclaw, St. Francis in Federal Way, Highline Medical Center and Regional Hospital in Burien) and Kitsap County (Harrison Medical Center in Bremerton and Silverdale).