Healthcare bosses are drawing up radical plans to transform the Whipps Cross Hospital site, including space for "hundreds" of homes and new leisure facilities.
Barts Health Trust, which operates the Leytonstone hospital, announced in February it was seeking £500 million from NHS Improvement for a complete overhaul of the site.
Executives have exclusively told the Guardian Series plans would see a "significant proportion, if not all" of the 114-year-old hospital torn down and redeveloped over the next five to ten years.
The health trust says the project would be cheaper in the long run than maintaining the "ageing" buildings currently on site, most of which were constructed in the Edwardian era.
Alastair Finney, Barts Health strategy programme director, said: "Whipps Cross is not going to close, it has a future, but then you look at the building and see it is not fit for purpose.
"There is a lot wrong with the way the estate is laid out and there is a powerful case for change.
"We have laid out a vision for the future which goes beyond it just being a hospital, we are talking about other services.
"For instance we struggle elsewhere in the community to find "step-down beds", where people are ready to leave acute hospital but not to go home.
"There is the possibility of bringing a nursing home here, there will be a range of services that better meet what local people need.
"I envisage an older person coming to Whipps Cross not only to see several specialists, but also go to a lunch club to combat loneliness and possibly leisure activities as well.
"We want Whipps Cross to become a place you come to stay healthy, not just where you go when you are sick."
Whipps Cross has faced string of difficulties in recent years and was placed into special measures after a damning report by healthcare watchdog the Care Quality Commission (CQC) in 2015.
Findings of a fresh inspection, published in December last year, found improvements had been made at the hospital, but still rated the site "inadequate" overall.
The most recent report found the hospital’s A&E department still required improvement, with patients waiting more than double the 15-minute target time for an initial assessment.
End-of-life care was also judged to be poor, with inspectors noting they saw dying patients in visible pain who did not get help from staff.
The hospital did however, receive "good" ratings for its maternity and gynaecology services and its care of children and young people.
Redevlopment plans for the site are likely to include significant housing development, including a proportion of "affordable" homes and properties for public sector workers.
Mr Finney added: "The site about 18 hectares. The scale is so big it is inefficient and we will not need anything like to rebuild the hospital, we can build it on a much smaller footprint.
"We have got the opportunity to work with our local authority colleagues around housing and affordable housing and what that may look like.
"Housing is a core option of the plans, we will also look at using some of that housing for our own staff and other public sector staff in Waltham Forest and Redbridge.
"I would say we are looking at hundreds of units, not just dozens, but until we have worked up a masterplan for the site I would be loathe to commit to a particular number."
If given approval by the NHS, the hospital will run a series of public consultations and draw up a detailed masterplan for the new site.
It hopes to get full proposals signed off by the Department of Health in 2018, which would allow redevelopment work to begin in 2020.