Northumbria Healthcare NHS Foundation Trust has submitted a planning application to replace Haltwhistle War Memorial Hospital.
The development is being commissioned in conjunction with Northumberland County Council and will house both health and social care services.
The new-build scheme, part of the health trust’s plans to invest £200million in service improvements over the next 10 years, will include extra care services, replacing residential care beds currently delivered at Greenholme.
Councillor Ian Lindley, executive member for health and wellbeing at Northumberland County Council, said: “We have always been committed to providing an integrated health and social care scheme for Haltwhistle and ensuring the development reflects the views of the community and key stakeholders.
“We are pleased that the application has been submitted and this represents a significant step forward for the project.
“Local people gave us their views on two occasions last year and we have taken their feedback into account when putting together the application. For example the position of the building on the site and the design of the external walls and the roof have all been modified as a result of comments from the community.
“We look forward to working through the planning process and bringing this project to fruition.”
The scheme aims to promote the welfare and independence of people with a long-term health condition or disability, particularly older people.
The building will have 15 hospital beds providing rehabilitation, a minor injuries unit and physiotherapy and occupational therapy facilities. There will also be 12 extra care flats with 24-hour support for tenants.
During construction, inpatient services currently provided at Haltwhistle War Memorial Hospital will transfer to Hexham General Hospital.
Once on site, building work is expected to take about a year.