St Richard's Hospital in Chichester has been given almost £1 million to provide a place to care for patients who aren't ready to return home.
The £900,000 from the Department of Health will be used to refurbish an existing ward area at St Richard's Hospital in Chichester.
Up to 26 patients who no longer need an acute bed but who are not well enough to go home will be able to get care on the ward.
Jill King, director of community and intermediate care at Western Sussex Primary Care Trust, said: "Community hospitals already exist in Arundel, Bognor and Midhurst and they serve their local people admirably.
"However, Chichester residents have only an acute hospital, so rehabilitation and post-operative recovery often takes place in an area away from where they live.
This unit will make a real difference to Chichester people."
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