Wolverhampton Council has today announced a bid has been submitted for the scheme, which they say will see Bilston "flourish" for years to come.
The authority wants £20m from the second round of the Government's levelling up fund to go towards the £32.2m project, which will also see improvement works to the market and a 'pocket park'.
It comes after a separate £20m bid was submitted for a 'green innovation corridor' around Springfield campus, and is on top of last year's successful bid for £20m for the city learning quarter.
The Bilston scheme aims to deliver a state-of-the-art health and wellbeing hub next to WV Active Bilston-Bert Williams. It will bring together partners and providers from the NHS, social care and wellbeing and leisure sectors to support around 18,000 patients.
Wolverhampton Council leader, Councillor Ian Brookfield, said the scheme would help Bilston to "flourish".
"The Bilston health and regeneration programme will deliver major benefits in the town to support the programme of investment delivered in this locality by the council and key partners over several years," he said.
"This facility will be located where it can benefit the town the most, right in the centre, making it highly accessible, underpinned by investment in public realm and connectivity."
The new centre will connect to public space improvements and Bilston’s public transport hub, while work at the markets will see additional event space and a new taxi drop-off and bike hub close to the bus station and tram stop.
A new ‘pocket park’ will be developed between the Black Country Route and Church Street, creating a venue for street food and music.
Wolverhampton South East MP Pat McFadden, said: "Health inequalities are a major issue in Wolverhampton and across the country. These inequalities were exposed by the experience of Covid.
"Improving health and wellbeing is a big part of making levelling up work. This bid can help us do that."
West Midlands Mayor Andy Street, said: "The scheme will significantly enhance the lives of those living and visiting Bilston by concentrating and co-locating new services and uses whilst investing in the existing traditional retail offer."
A decision on levelling up bids is expected in October.
The authority said the remaining funding required for the overall Bilston programme will be made up of £5.2m from the Towns Fund, plus council and partner contributions.