A private hospital in Hobart is closing in June, leaving the state with 31 fewer mental health beds.
The St Helen's Private Hospital offers drug and alcohol treatment services, 31 inpatient mental health beds, day-patient programs and an eight-bed mother and baby unit for those needing help with sleep and post-natal mental health problems.
Last year the hospital's owner, Healthscope, reviewed the maintenance required at the ageing hospital and has now determined the bill is too high.
"We have operated in the heritage-listed building for as long as we can," Healthscope CEO Greg Horan said.
"It now requires a multi-million-dollar investment to replace the roof, electrical systems and hydraulics. Unfortunately, this investment is not viable for Healthscope."
Last week the ABC revealed Healthscope was in talks with Tasmania's health department about how the potential closure would affect the rest of the health system.
The uncertainty worried mental health advocates and parents who had been treated at the mother-baby unit, with Tasmania's Mental Health Council saying the unit was an essential service.
Tasmanian Premier and Health Minister Jeremy Rockliff said work was underway to make sure people could still access mental health services, despite the closure, and that included setting up a mother and baby unit within the Tasmanian Health Service (THS).
"Planning is well underway to establish a public mother-baby unit in the THS and we have had initial discussions with other providers about their ability to establish this service in future," Mr Rockliff said.
"The THS is also working with other non-government providers to ensure the health system is ready to meet any additional patient demand for in-hospital services."
Healthscope's national manager for mental health, Adjunct Associate Professor Steven Bernardil, said current patients would get support and information about how to access services in the future.
He said, if possible, hospital staff would be offered employment at other Healthscope facilities around Australia.
"If redeployment is not possible, staff may be able to take up employment opportunities with the Tasmanian government, following the relevant recruitment processes," Professor Bernardi said.
Healthscope also operates the Hobart Private Hospital.
