A private hospital partly paid for by a public fund-raising appeal could be demolished to make way for a five-storey block of flats.
Plans to knock down the Nuffield Hospital in New Church Road, Hove, and build 70 homes on the site have been submitted to Brighton and Hove City Council.
Belmont Homes, which bought the site last August, hopes to transform the former hospital into a residential development which would include 28 affordable homes.
Each of the 70 flats would have its own parking space, the majority underground, with an extra seven for visitors.
Belmont Homes is also offering each flat a bike to encourage residents to cycle and a state-of-the-art boiler system which served all the flats would be installed to cut down on carbon dioxide emissions.
Nearby St Peter's Church in New Church Road, Hove, would receive a sum of money from Belmont to renovate its community facilities.
Councillor Brian Oxley said: "It is a good scheme for the ward and it takes into account what a lot of people have asked for.
"At five storeys, it is no taller than any of the immediately surrounding properties and it will be much more in keeping with the area - which is a relief to residents."
A spokeswoman from Green Issues, which organised a public consultation on the proposals, said: "Belmont Homes has consulted widely on the New Church Road proposals and ensured the plans submitted to the council reflect the views of the community by increasing the number of on site parking spaces, reducing the height of the building and increasing the number of flats that have three bedrooms.
"It has also identified a community use improvement at St Peter's Church."
Patients were last year transferred to the Nuffield Hospital in Woodingdean, built in 1985 at a cost of £10 million, when the Nuffield Nursing Homes Trust made the decision to sell the New Church Road site.
The £1 million hospital opened in 1976 with the support of a £420,000 fund raising appeal - the equivalent of £3.4 million today.
The money was raised through legacies and donations from local businesses, consultants and doctors.
It was expanded in the Eighties following a second £250,000 appeal.
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