Oxford University wants to build a new health centre at the Radcliffe Infirmary as part of the site's £240m redevelopment.

But the proposed £10m healthcare facility will be only a quarter of the size of the super surgery originally put forward. And it will leave the local primary health trust having to search for a second site in Oxford to house local GPs left in outdated surgeries.

The university deal with Oxfordshire Primary Care Trust will see a health centre created on the far north western corner of the RI site, facing on to Walton Street.

A detailed planning application will be submitted in March with the health centre expected to open at the end of 2008, as the first new building. The new facility will allow three GP practices currently operating in the cramped and ageing buildings in the Jericho Health Centre to be rehoused, along with a practice at the North Oxford Medical Centre, in Woodstock Road.

But it will not, however, be big enough to accommodate GPs based in unsuitable premises in Beaumont Street.

The health trust's own scheme to build a centre at the RI floundered in the face of opposition from both city planners concerned about extra traffic, and the university itself, which acquired the prime 10.5 acre site.

Oxford University had been obliged to offer 2.8 acres of the site to the health trust when it bought the hospital site three years ago.

But under the new agreement, the trust will not be taking up the option. Instead the university will fund and construct a new 3,500 sq m health centre building and will then lease the building to the PCT over 25 years.

The university has undertaken to assist the PCT to explore land options for another major healthcare facility in the city's West End redevelopment area.

The Radcliffe Infirmary will close as a hospital early in the new year, with departments, staff and patients being moved over the next few weeks to the expanded John Radcliffe. The RI site will then be transformed into a major university campus.

Andrea Young, Chief Executive of Oxfordshire PCT, said: "This is a positive step to providing our GPs with a modern, patient-centred environment to meet advances in healthcare."

Julie Maxton, the Registrar of the University, said: "The University has always had very close links with the Oxford community and is involved in a range of projects. We are looking forward to assisting the PCT in providing a state-of-the-art health centre."