The only NHS hospital in Britain that specialises in learning disabilities is to be closed down as part of a review following the Winterbourne View care home abuse scandal.
The closure is part of a wider review that could see the number of inpatient beds in England for people with learning disabilities cut by half.
NHS England announced the closure of 223 beds at Calderstones hospital, which is based in the Lancashire village of Whalley in the Ribble Valley.
The unit came in for heavy criticism in December from the Care Quality Commission (CQC) after inspectors found "serious deficiencies" in the quality of care.
They found poor cleanliness and hygiene on the wards, low levels of staffing and too many instances when patients were restrained in the face-down position.
The hospital offers secure and specialist NHS services to adult men and women with learning disabilities or other developmental disorders, who are often referred there after contact with the criminal justice system.
The closure announcement, which is subject to consultation, was made as part of a review that will see hundreds of people in England with learning disabilities cared for in the community rather than in hospital units.
The new plan predicts that as new community services are put in place, there will be a reduction of up to 50% in the number of inpatient beds in England.
Other units will close alongside Calderstones, with more care transferred into people's own homes or to other facilities.
Mersey Care NHS Trust intends to take over the Calderstones Partnership NHS Foundation Trust, which will cease to exist from next July.
As of the end of September, 2,595 people in England with learning disabilities and/or autism were in inpatient units, NHS England said.
More than three-quarters of these had been in for longer than a year, despite the fact the number of discharges or transfers has increased by 38% over the last year.
NHS England said inpatient beds are too often used as a long-term option due to a lack of community services, and they cost on average over £175,000 per year for "often inappropriate care".
Under the new £45 million three-year plan from NHS England, the Local Government Association and the Association of Directors of Adult Social Services, money will be invested in local housing to meet the needs of people with learning disabilities.
These will include schemes where people have their own home but have access to support staff on-site.
People and their families will also be able to plan their own care via personal health budgets, and there will be a stronger role for charities offering support.
Budgets will be shared between the NHS and local councils to smooth the transition.
Sir Stephen Bubb, who headed a major review following the Winterbourne View scandal, said last year that units should close.
The BBC's Panoroma programme revealed the neglect and abuse of patients by staff at Winterbourne View, in Hambrook, South Gloucestershire, in 2011.
Six people were jailed in 2012 and five were given suspended sentences.
They were filmed slapping vulnerable residents and pulling their hair, soaking them in water, trapping them under chairs and taunting and swearing at them.
Whistleblower Terry Bryan, a former nurse at the home, contacted the BBC after his warnings were ignored by Castlebeck Ltd.
Workers at Winterbourne View raised concerns about staff behaviour to South Gloucestershire Council 19 times before Panorama filmed there, as well as contacting the CQC.