The Severalls Hospital site and Turner Village will be handed over for development as part of a groundbreaking deal.
Low-cost homes for key workers, such as nurses, police and teachers, will be built on surplus NHS land across the country.
The land will be transferred to the Government in a deal officially announced by deputy Prime Minister John Prescott and health secretary John Reid.
The Colchester land will form part of the planned development of 460 homes, a primary school and a health centre.
Money raised from the sale of the site will be re-invested in the NHS.
A spokesman for Essex Rivers Healthcare NHS Trust which runs Colchester General and Essex County Hospital welcomed more investment in the NHS.
Published Thursday April 8, 2004
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article