The main building at Hutt Hospital, the Heretaunga Block, has been deemed earthquake-prone.
Hutt Valley and Capital & Coast District Health Boards chief executive Fionnagh Dougan said they have some years to bring the building back to acceptable levels but the work would disrupt patient care.
"Instead, we will be looking at how we can move patients and services out of the building as well as examining what alternative arrangements might work for our communities."
Hutt City mayor Campbell Barry said the Heretaunga Block housed 79 per cent of the beds at the hospital, and made up 25 per cent of the overall hospital bed capacity in the region.
Barry said he was shocked the decision to gradually close the building was not accompanied by a full commitment to the future of Hutt Hospital.
"Once beds, specialist services and staff leave the Hutt for elsewhere, I'm deeply concerned they may never come back. Today may well represent the long-term removal of tertiary health services in the Hutt Valley."
Barry said he wanted the Government to commit to a full rebuild of the hospital site.
"The Hutt has a deep and proud connection to our hospital and the vital health services it provides for our people. We will fight tooth and nail to ensure Hutt Hospital's future is secured."
The eight-storey building houses services including the general surgery and gynaecology ward, the orthopaedic ward, maternity services and the children's ward.
Hutt South MP Ginny Andersen said the situation would come as a shock to people, as it did for her.
"But it's really important that people out there know there is absolutely no plan to reduce the level of hospital care provided in the Hutt Valley and the issues identified today in the Heretaunga Block have in no way changed that."
Andersen said she wanted to know as soon as possible whether a full rebuild or remediation was required.
The Government has made a commitment to retain hospital services in the Hutt Valley that were at least as good if not better, Andersen said.
National list MP Chris Bishop said it was important the Hutt continued to have a well-resourced and functional hospital.
Bishop said there was an "information vacuum" this afternoon and he wanted to know more about the building's status and what was needed to bring it up to code.
The seismic risk was found as part of a wider assessment of the DHB's facilities.
Dougan said there were problems with columns and beams, precast concrete facade panel connections, and some stairs.
Anything less than 34 per cent of the New Building Standard is considered earthquake-prone. The DHB would not disclose the building's rating, but confirmed it was below 34 per cent.
A draft detailed seismic assessment was completed on March 8 and since then the DHB has been working closely with engineers to understand the situation.
A peer review was also commissioned.
Dougan said some board members would have become aware of the situation in April through their other committee duties, but some may have only learned of it when a report was tabled at a meeting on Friday.
The DHB has established an "integrated governance model" to assess options and come up with a plan to relocate services while ensuring continuity and access to healthcare.
In the meantime, services would continue to be delivered from the Heretaunga Block and people could continue to access healthcare at Hutt Hospital as they normally would, she said.
"We are working closely with experts and following all advice – part of which confirms that the risk posed to people is low. This means that we can continue to utilise the building for healthcare services while we consider all the options and plan our exit from the building."
Dougan said the future of the Heretaunga building and the site will be determined in the wider context of Health New Zealand's role to manage nationwide service planning and infrastructure.
Health New Zealand has been established to replace DHBs and run the system instead.