One of Britain's two remaining military hospitals will close at the end of the financial year.
Duchess of Kent Hospital in Catterick will 'cease to be an inpatient hospital' from April, Ron Smith, chief executive of the Defence Secondary Care Agency, has confirmed.
Primary care facilities and a psychiatric hospital will be left on site. Negotiations are also underway to create a Ministry of Defence Hospital Unit at a local trust, probably Darlington Memorial Hospital trust.
DKH survived as one of two directly managed units after a review of forces medical services in 1994. It has been under 'active review' for 18 months because GPs were reluctant to use it.
The remaining directly managed military hospital is Royal Hospital Haslar in Gosport.
RHH has also been under examination as part of another review of forces' healthcare triggered by a critical report from the Commons defence select committee.
Mr Smith, who leaves the DSCA tomorrow, said this review was likely to be published alongside the government's strategic defence review this month.
'Ministers have gone on record as saying defence medical services are under-resourced and I think there will be more funding,' he added.
Mr Smith, a former health authority chief executive, was unhappy with suggestions that the reason for his departure ahead of the review's publication was unclear.
'I have always said that this organisation should be headed by a serving officer,' he said. 'I am still of that opinion.
'When I came here three years ago, we started from a very low base. I have now done most of my work by completing this review.
'The MoD offered to let me see it through, but I felt it was time to move on.'