Initial plans for a £16.3m investment in new facilities to replace Rookwood rehabilitation hospital in Cardiff have been approved by the Welsh Government.
Under the plan, Rookwood's specialist neurological and spinal rehabilitation services will be re-located to a new facility at the University Hospital Llandough.
Elderly care services currently based at Rookwood will be relocated to St David's Hospital.
Other services currently based at University Hospital Llandough and St David's Hospital will be relocated to facilities better suited to supporting their models of care across other areas of the existing UHB estate to release the space required.
The investment will allow Cardiff and Vale University Health Board to improve patient outcomes, by co-locating specialist neurological and spinal rehabilitation services on an acute hospital site.
Rookwood Hospital's history dates back to 1886 and has been used as the home of Sir Edward and Lady Hill.
At the end of World War 1 it was used as a home for Welsh paraplegic pensioner cases.
It has more recently been home to the largest of Cardiff's Parkinsons Disease services.
Planners for the Cardiff and Vale Health Board say the site is now very old and does not meet the needs of the modern and advanced care they provide there.