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Oamaru's "hospital on the hill" is to be demolished to make way for a new housing development.
The old hospital overlooking the town has lain dormant since the new hospital was opened in 2000.
Goodland Group, which owns the land and buildings on the site, will start work later this month, and demolition is expected to take three months.
There are no further details on the housing development as yet.
The Waitaki District Council is to use demolition material from the old hospital to "cap" the Oamaru landfill when it closes.
Water services and waste manager Martin Pacey said the landfill, due to close later this year, would require years of on-going maintenance.
"Once the landfill has closed, we will continue to apply measures so that we comply with our resource consent and meet health and safety regulations including 'capping' the landfill," Mr Pacey said.
"The debris from the old hospital buildings will be used at the landfill for stabilisation purposes. This process will be in accordance with the resource consent we have."