The Chief Medical Officer, Professor Sir Liam Donaldson, was visiting the site of new student accommodation which he said would help put Northampton's hospital on the national training map and prompt an improvement in the quality of patient care.
Sir Liam unveiled the site of the new student block at a ceremony this week. It will be called the William Kerr building, and will house 45 students and a state-of-the-art library.
Students from Leicester Medical School, based at NGH, will live in the building during the third year of their medicine degree.
They will be trained at the town's hospital, which currently teaches students from Oxford and Leicester medical schools.
The new building will create an additional 20 undergraduate places.
Sir Donaldson said the expansion would see NGH become recognised as a teaching hospital.
He said: "Medical student teaching is not done everywhere in the country. Where you have good teaching hospitals, standards get higher in the quality of care.
"It will benefit the students, staff and most of all the patients.
"Also when the students qualify some of them will come back and live and work in Northampton."
The development was funded by the University of Leicester Medical School and the Leicestershire, Northamptonshire and Rutland Workforce Development Confederation.
The Maud Richmond Legacy, a bequest to the NGH trust, made a significant contribution to the development of the new library, which is to be called the Richmond Library.
Andrew Riley, chief executive, said: "We are continuing to strengthen our relationship with the University of Leicester, and promote the trust's reputation as an excellent undergraduate teaching centre.
"It is a tremendous responsibility to educate the next generation of doctors."
The building is named after Dr William Kerr who founded medical education in Northampton.
He was the principal fundraiser for a new, larger hospital on the present hospital site, which opened in 1793.
Dr Kerr practised at the hospital until he was 83, and died at the age of 86.
lily.canter@northantsnews.co.uk