The date 29 July 2007 witnessed the beginning of a new chapter for Hospital Sultanah Bahiyah. It started operation at the modern and beautiful hospital complex after a complete transfer and replacing Hospital Alor Setar.

The new hospital is strategically located 6km from the centre of Alor Setar City, Kedah and within the sight of the PLUS North-South Highway (exit Alor Setar Utara), which easily makes it accessible. The building complex occupies 110.200 m2 of spaces, sits on a 28.33 hectares site of flat land, and is surrounded by vast area of padi field. The previous hospital is now renamed Hospital Sultanah Bahiyah II.

Hospital Sultanah Bahiyah is expected to play a more effective transformational role as a regional referral centre for 8 government hospitals, 12 Health Clinics in the district of Kota Setar and Pendang, and 11 private hospitals. The hospital implements the online Total Hospital Information System (THIS), thus guaranteeing high quality services. The new complex incorporates 4 main buildings, namely the Medical Support Block (Specialist Clinic), Ward Block, Main Block and Non-Medical Support Block (Management Office). The facilities here include 12 Operation Theatres, 6 Day Care Operation Rooms and 13 Maternity Rooms. Up till July 2016, this hospital operates with 1084 beds whereby 923 beds are offered in Hospital Sultanah Bahiyah and the rest are placed in Hospital Sultanah Bahiyah II.