Work to demolish two former hospital accommodation blocks has started as part of a £22.7m project to redevelop the site.
The North Devon District Hospital in Barnstaple was given the money from the New Hospital Programme.
The two buildings will be replaced with new housing which will provide 120 ensuite bedrooms, including four fully accessible family apartments and six single accessible ensuite rooms.
Prof David Sanders, clinical director of surgery at the hospital, said “in order to attract staff and be able to retain them… it’s vitally important” to build the new accommodation.