A private hospital with 239 staff and 20,000 patients a year is to close after the collapse of talks between developers and a healthcare firm.
The closure ends a long struggle by the liquidator and local community
A three-year fight to save the King Edward VII Hospital, in Midhurst, West Sussex, began in December 2002 when it went into provisional liquidation.
A staggered closure of the hospital's services over the next two months was announced on Thursday morning.
It will affect patients in Sussex, Hampshire and the Isle of Wight.
The King Edward VII served 12,000 NHS and 8,000 private patients a year, specialising in cardiac and cancer treatment.
Its future appeared to have been secured in November 2003 when a deal was reached for a new hospital and 300 homes to be built on the site.
Shay Bannon, provisional liquidator with BDO Stoy Hayward, said on Thursday: "We are extremely disappointed that Lincoln Holdings and Capio Healthcare were unable to reach an agreement.
"We have been left with no alternative other than to implement a closure plan."
A spokeswoman for BDO Stoy Hayward said clinical services would end at the hospital within a fortnight with a full closure in six to eight weeks.
Hospital manager Paul Duhig said: "We will be doing everything we can to transfer patients as seamlessly as we can to new hospitals."
Staff facing redundancy will be offered guidance and support over the next few weeks.
Capio Healthcare UK said a solution could not be found on "some major issues in the development".
Andrew Tyrie, Conservative MP for Chichester in West Sussex, said he was "extremely disappointed and upset" at the closure news.