The two parities announced in December a letter of intent for the for-profit entity to take over the struggling hospital.
"In recent years, St. Michael's has struggled to meet the challenges of today's rapidly changing health care landscape," David Ricci, president and CEO of St. Michael's, said in the announcement. "After significant deliberation, we determined that Prime Healthcare is best positioned to keep this vital facility from closing."
The agreement provides $25 million in capital to modernize the facility, as well as a promise to keep the facility open as an acute care hospital for five years. A similar agreement was reached with St. Mary's Hospital last month.
The purchase must now go through the approval channels, including the Department of Health, the state Attorney General's office and the Vatican.