For over 40 years it had provided housing for families of hospital patients who had travelled from out of town for treatment.
WDHB board member, Judith MacDonald, asked if the closure will be a large compromise for those families.
WDHB chief executive, Julie Patterson, said the board had no prior warning of the closure but she understood why it had happened and the focus was to find a replacement.
"We are lucky there are three motels in easy walking distance so we will probably look at talking to them," Mrs Patterson said.
Another emergency accommodation, Mauri Ora, was still available for families but capacity was limited.
The Salvation Army will be using the Ozanam Villa facility and the adjoining flats for emergency housing.
Mrs Patterson said the board will be aiming to find a solution by the next WDHB board meeting on September 15.