Elderly mental health patients are promised better hospital services when in-patient beds transfer to a new site.
Great Yarmouth and Waveney Primary Care Trust (PCT) said it will shut two wards it describes as "unfit", at Northgate Hospital in Great Yarmouth by April.
The 26 beds for patients with dementia or depression will transfer to Carlton Court near Lowestoft in Suffolk.
The trust said it will also deliver more health services at home, which will save it £1.2m.
A spokesman for the trust said that the savings will be reinvested in patient services, with some being used to increase the community staff by the equivalent of 11 full-time posts.
Finance for travel
Mike Stonard, chief executive of the Great Yarmouth and Waveney PCT, said: "The current accommodation in what were two maternity wards at Northgate Hospital is recognised as unfit for a modern NHS.
"They failed to provide vulnerable older people with privacy and dignity despite investment and the best efforts of staff."
Rachel Newson, from Norfolk and Waveney Mental Health NHS Trust, said: "We are delighted to be in a position to further improve the services that older people with mental health problems will experience."
Mr Stonard added: "There was concern about the issue of transport for carers and families from the Great Yarmouth area wanting to visit Carlton Court, so we have set aside some money for this purpose and will review it regularly."
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