Laurel Regional Hospital, which has served Prince George's County since 1978, will be downsized into a walk-in outpatient medical center.
Hundreds of employees will be laid off. Some employees will be reassigned to other facilities.
The new center will offer only emergency services and outpatient surgery. Soon, patient beds will begin to be phased out.
The decision was made by Dimensions Healthcare System, a non-profit hospital system that serves the residents of Prince George's County and surrounding areas.
The hospital has been losing millions of dollars for years, according to Dimensions Healthcare spokeswoman Erika Murray. And admissions to the hospital have been declining.
But the decision was made without the approval of Laurel elected officials, and they aren't happy.
"The decision to close this full service hospital is yet another failure of Dimensions executives to operate their facilities in an efficient manner," Laurel Mayor Craig A. Moe said in a news release.
The hospital closing will have a negative affect on the already "stressed" ambulance service in Prince George's County, according to Moe.
"I am deeply concerned about the tremendous impact on the safety and well-being of the residents of northern Prince George's County and surrounding areas, and I am also troubled by the loss of many jobs for Prince George's County and Laurel residents that would follow this closure," Moe said.
The Prince George's County Fire and Emergency Medical Services Department was also not aware of the plan to close the hospital, according to a press release.
But Dimensions Healthcare says the new center will seek to offer new approaches to preventive health and welfare, Murray said.
The transition will take place over the next year. There will be no changes to the current emergency, diagnostic imaging and outpatient surgery services during the transition.
The new $25 million ambulatory care center is expected by 2018 and will be built on the existing hospital campus.
University of Maryland Medical Center is opening the $655 million Prince George's Regional Medical Center at the Largo Town Center in partnership with Dimensions, and has been helping Dimensions organize its system.