Brownhill House, a council-run care home in Southampton, is closing down with the loss of 40 jobs.
Councillors say the services offered at the home can be provided better to residents at their own homes.
Bownhill House offers residential care without nursing for up to 39 residents. Most are short-term visitors who need respite and rehabilitation services, often after a spell in hospital.
Council leaders told a public meeting that the building is in need of expensive improvements, and the money would be better-spent offering services to people at home.
Labour health and social care cabinet member Dave Shields said that the plan had widespread support from health and social care professionals. “This isn’t about the council taking away money from a service, this is about working together with our partners to make the best of our resources,” he added.