A cash injection of £60 million was announced on Wednesday for the school at Ulster University’s Magee campus.
It is part of £1 billionn worth of extra funding from the government to support the Stormont deal.
The Magee school was meant to open last year but plans to train doctors in Derry have been hit by a series of delays.
Last year a Department of Health (DoH) commissioned review led by Dr Keith Gardiner warned that Northern Ireland needs at least 100 more medical students a year.
BMA chair Dr Tom Black said a second medical school would help meet that demand.
“This is where we need the doctors in the future,” he told BBC Radio Foyle on Thursday.
“We had the Gardiner report nearly a year ago.
“We do need these medical students, we need those extra doctors, I am confident the money will be spent and will be available.”
The newly announced funding, including £45m provided by the Inclusive Future Fund announced in May 2019, is now subject to Stormont executive approval.
University officials hope the financial package will be the final piece in the jigsaw for the plan to train future doctors.
“The commitment from the UK Government to ring fence funds to deliver the graduate entry medical school is a very welcome further step forward,” a UU spokeswoman said.
The spokeswoman added: “We will continue to work with Department of Health officials and the NI executive in this process.”
The only medical school in the North of Ireland is at Queen’s University in Belfast.