More than 120 health board staff based at Newstead are being transferred to offices at Borders General Hospital and elsewhere.
NHS Borders has to save £4.8million by the end of the current financial year and the closure of the former fever hospital site, where the offices are based, is part of the savings.
Employees are being moved to various locations, including the education centre, Westgrove, as well as to the BGH itself, this month.
NHS Borders said: “The closure of the Newstead site will reduce our property, energy and maintenance costs, in addition to releasing a capital resource for investment in healthcare services.
“NHS Borders is working in partnership with the individual departments at Newstead to ensure the moves are completed within the required timescale and with minimum disruption to services.
“Once all employees have been relocated from Newstead, the site will be placed for sale on the open market.”
Asked if the transfer of so many staff to the BGH would exacerbate current parking problems at the hospital, a spokesperson said those employees who are being relocated to the BGH have been encouraged to car-share.
“A car-sharing scheme was introduced before and employees have also been told they can continue to park at the Newstead offices for the moment and car-share from there to relieve the pressure on the BGH carparks,” she said.
“As many staff from Newstead also work in support services, they are often out and about and are flexible, which should also help the parking situation.”
A survey was recently carried out at the Newstead site to ascertain the extent of erosion of the cliff face at the rear of the property, overlooking the River Tweed.
A 10m area, including a small building, was cordoned off and cleared as a result.