Aberaeron Hospital, which has served the town for over 180 years, may be turned into housing association flats, the Cambrian News has learnt.
The distinctive building in Princes Avenue began life as part of the Aberaeron Union Workhouse in 1838.
It later served as a hospital for injured soldiers during World War One before becoming a cottage hospital in 1930.
Deemed unfit for purpose, the cottage hospital is poised to make way for the Aberaeron Integrated Care Centre which opens on 21 October.
A spokesman for Hywel Dda Health Board confirmed that a social landlord had expressed an interest in the property.
“In accordance with Welsh Government’s Affordable Housing Protocol the health board has notified Ceredigion County Council of its intention to dispose of Aberaeron Hospital,” he said.
“There has been an expression of interest from a registered social landlord through the local authority and as such we are proceeding on this basis at the moment.”
Aberaeron county councillor Elizabeth Evans said troops were garrisoned at the hospital during the Rebecca Riots of the 1840s when protesters were targeting such buildings in protest at the Poor Law.
“Amazingly it still contains the patient files from the workhouse,” she added.
“I have asked that all things related to the history of the building, and the people who lived and worked there, be preserved for Aberaeron"