THE St John of God Hospital at Scorton, near Richmond, is set to close and the building will be sold.
The Hospitaller Order which runs the 120-year-old unit confirmed that services would be relocated elsewhere in Richmondshire, with the monks also moving out to be nearer the services they provide.
It is likely to take between two and five years to complete the move, after which the building would be sold to help fund the changes.
Liz Pollard, managing director of the hospital, said the proposals represented a development of services, which would increase in size, creating more jobs. Community-based locations are favoured.
The hospital closed down its acute services amid controversy last year to concentrate on nursing the elderly, dementia sufferers and adults with complex care needs.
"The services are not going to close," said Ms Pollard. "Since last year we have been looking at how we can best use the building. The bottom line is that, in the light of the care standards legislation coming in and general social care policies, the constraints of the building do not allow us to further develop the services here.
"Over two to five years we are looking to re-provide these services within Richmondshire, although we have not yet identified specific locations. The Scorton site will be sold ultimately."
The Very Rev Bro John Martin, provincial of the order, said: "We have looked at the appropriateness and standard of the accommodation provided and, more importantly, we have given consideration as to how we can improve the quality of life for the people using the order's services at Scorton.
"The cost of maintaining and refurbishing the existing buildings to meet the requirements of legislation governing care services and health and safety requirements has also been taken into account."
Service users, their relatives and carers, staff and partner agencies are to be consulted on the proposals, after which plans will be drawn up for the relocation.
"When we have embarked on such developments in the past we have found that new opportunities are created and that would be our hope, in order that we might meet an ever increasing need," said Bro John.
The Hospitaller Order of St John of God was founded in 1539 and is now a worldwide religious order of more than 1,400 brothers and 200 healthcare units in 48 countries.
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