Mount Carmel hospital will be converted into a home for the elderly, Health Minister Jo Etienne Abela has announced
Speaking during an Fliving debate with PN MP Adrian Delia, Abela said the government plans to phase out the psychiatric services offered by the hospital.
Instead, the government plans to convert the hospital into a "second St Vincent De Paul".
He said the Attard hospital is ideal for this use.
In May, the government initiated a four-year plan to close down Mount Carmel.
He cautioned that improving the healthcare service is not just about "new buildings."
The minister said adequate human resources, including foreign workers, were needed.
Abela also announced that Mater Dei Hospital will be offering "after-hours" operations during the week and on Sundays, in a bid to cut down waiting lists.
Pressure on the country's healthcare service came into sharp focus this week after a 55-year-old man died at Mater Dei Hospital's emergency waiting room where he was left waiting despite allegedly complaining of chest pain.
Abela has announced an inquiry into the death.
The minister has previously announced plans to increase the number of round-the-clock health centres in Malta from three to five.
Another project - the Paola Health Centre - has been plagued by delays.
The government is mulling severing ties with the contractor responsible for the Paola health hub after a series of missed deadlines in the project’s final stages means it has been unable to open its doors to the public.
Although construction work has been completed, sources say the contractor has missed as many as 17 deadlines in recent months, most linked to certification and quality control.
Ex-prime minister Joseph Muscat and a slew of other former government officials are facing charges linked to corruption in the health sector.