The lengthy battle over which health system will construct a hospital in Hoke County has ended — in a draw.

Following an extensive mediation process, FirstHealth of the Carolinas and Cape Fear Valley Medical Center jointly announced Thursday that they have reached a settlement agreement over their mutual 2010 certificate of need (CON) appeals.

In 2010, FirstHealth was awarded a CON to build an eight-bed hospital in Hoke County. Cape Fear Valley received a CON to build a 41-bed hospital, in Cumberland County near the Hoke line.

Each hospital appealed the other’s permit, and the appeals effectively prevented either entity from starting construction.

Terms of the agreement remain confidential, but FirstHealth CEO David J. Kilarski told employees and board members that both health systems will be able to “move forward with building their respective hospitals.”

“This is great news for Hoke County, and we are excited to begin construction of our hospital in this community that so desperately needs access to quality emergency room and hospital services,” Kilarski said in a memo sent Thursday.

In a telephone interview Thursday afternoon, Kilarski said the N.C. Division of Health Service Regulation approved the agreement before it was signed Wednesday by the health systems.

“I think the tipping point for us was that we both realized it was going to take a lot of litigation, a lot of time and a lot of expense, and we’d probably end up at the same place,” he said. “We probably could have litigated another two years, but in the meantime the citizens of Hoke County continue to be underserved.”

FirstHealth officials hope to break ground soon on the $34.1 million project and have it completed by spring 2014.

“We’ll start some of the site work in the next week or two,” Kilarski said. “We expect to have more than 100 part- and full-time employees. That’s going to be a big boost for Hoke County, and we’re not going to take positions away from our operations in Moore County.”

Julian King, a Hoke County resident and chairman of the FirstHealth Board of Directors, said he was “excited to hear that Hoke will soon have access to local hospital services.”

“Building both hospitals will have a great economic impact in Hoke County,” King said in a statement. “I am pleased an agreement has been reached and that both hospitals can move forward with their plans to bring hospital care to Hoke County.”

The FirstHealth Hoke Community Hospital will house a 24-hour-a-day, seven-day-a-week emergency room staffed by Pinehurst-based Moore Regional Hospital physicians. In addition to the emergency beds, the hospital will include eight inpatient beds, an overnight observation unit and one operating room, full laboratory services, state-of-the-art imaging technology and diagnostic cardiology.

The initial hospital will be built to allow for additional expansion. Future plans for the 30-acre medical complex site on U.S. 401 include medical office space and other health care-related services and facilities.

Cape Fear Valley plans to invest more than $100 million at its 60-acre site on U.S. 401 closer to the Hoke-Cumberland line. The first phase — an outpatient center called Health Pavilion Hoke — is already under construction.

“We have a longstanding commitment to serve the residents of Hoke County and are excited about bringing the county’s residents their own full-service hospital,” Michael Nagowski, CEO of Cape Fear Valley, said Thursday in a statement.

Cape Fear Valley’s hospital will include 41 inpatient beds, a 16-bed emergency department, seven observation beds, two operating rooms, four birthing suites and a C-section room. It will also have laboratory and imaging services.

“Hoke is a fast-growing community with many young families,” said John Henley, chairman of the Cape Fear Valley Board of Trustees. “We felt it was important to include obstetrical services in our hospital plans.”

Billy King, a Cumberland County commissioner and Cape Fear Valley board member, said the entire campus will provide “both an immediate and long-term stimulus for Hoke County’s economy.”