A further move, to larger premises on Mill Street, was enabled by a gift and later bequest totalling £7,000 made by Hannah Brackenbury, a philanthropist whose origins lay in Manchester. The funds were swelled by local workers who set up a Workpeople’s Fund Committee and ensured that the institution was without debt for the first time in its history. The Brackenbury funds had provided space for 50 inpatient beds, and thus the ability to become a hospital, although there were insufficient funds to enable use to be made of this until 1879, when six of the beds came into service. It was at this time that the organisation became known officially as "Ancoats Hospital and Ardwick and Ancoats Dispensary", although this was generally abbreviated to "Ancoats Hospital". The building was constructed to a design by Lewis and Crawcroft, the architects, between 1872 and 1874. Still standing, Manchester City Council says of this initial construction.
Originally the building had 3 storeys above basement level and it is probable that the ground floor typically accommodated the physician's entrance, patient's entrance and waiting rooms, sitting rooms, dispensing room and consulting rooms, with the upper floors accommodating board room, offices, library, private rooms and wards. It was also formerly characterised by a central tower structure.
The Ancoats Dispensary building has significance as the earliest and most architecturally notable building of the former hospital complex and largely comprises a red brick building with polychrome bands, and had steeply pitched hipped slate roofs, and is of an irregular plan, and of a gothic style.
The dispensary function of the hospital became a provident dispensary in 1875; the management of this was transferred to the Manchester and Salford Provident Dispensaries Association in 1885. The provident model was intended to address the perceived abuse of charity and the costs attributable to it. Means testing was introduced by the Association, which had arrangements with hospitals for the provision of treatment, midwifery services and similar requirements as well as providing care itself for, at worst, a minimal charge. People were eligible for membership if they were unable to obtain poor relief but too impoverished to afford medical care. The members paid a joining fee and a regular subscription. An extension to the Hospital was completed in 1888, providing an additional 50 beds, and a further 14 existed by 1915. A rural convalescent home, financed by a donation from the Crossley family and land provided by the David Lewis Trust, opened near Alderley Edge in 1904.
Despite generally functioning in difficult financial circumstances, the Hospital was able to innovate. It provided the city's first x-ray department in 1907 and, in 1914, Harry Platt - who was later to become a renowned orthopaedic surgeon - instituted the world's first clinic dedicated to the treatment of fractures. Platt introduced physiotherapy facilities, which were at first known as the School of Massage, in 1920 and that decade also saw the introduction of a specialist Aural department. Significant donations were recorded in a 1929 publication for the British Medical Association.
A centenary appeal was made in 1928, seeking £100,000 to enlarge the hospital. This succeeded despite the Great Depression, allowing the provision of an additional 100 beds, an extra operating theatre, a separate casualty block, enlargements to the x-ray facilities and pathology laboratory, and a permanent massage department. There was a formal opening of these improvements in 1935.
The Workpeople’s Fund Committee had raised much money over the years but ceased operation in 1948, in which year the National Health Service was established. There was a threat of closure during the 1950s but the next two decades saw continued improvements made to the structures and facilities, including the creation of new outpatients' and accident departments. The convalescent home, which had been used by injured soldiers during WWI, was transferred to the Mary Dendy Hospital in 1967 and the ability to deal with accident cases was lost in 1979, when that responsibility was transferred to North Manchester General Hospital. The plan had been for the Hospital to move away from being a general hospital and to function as a specialist orthopaedics unit.
It was closed in 1989.