The troubled hospital trust culpable in the deaths of up to 1,200 patients is to be dissolved, the health secretary has announced.
Jeremy Hunt said the management system in charge of Mid Staffordshire NHS Trust, which oversees Stafford and Cannock hospitals, is to be abolished.
A decision on whether to retain the trust had been pending since a public enquiry last year, which condemned it as "unsustainable" and found it caused the "suffering of hundreds of people" in its care between 2005 and 2009.
Thirsty patients at Stafford Hospital were forced to drink from vases, while others were left lying in their own excrement for hours by negligent staff. The scandal led to calls for medical staff who fail in their duty of care to face criminal action.
Blaming "failures of care" for the decision, Hunt said closing down Mid Staffordshire Trust will "secure the safe and high-quality services that the people of Stafford deserve having endured years of uncertainty and failures in care."
Hunt said that the management of Stafford and Cannock hospitals will transfer to neighbouring NHS Trusts.
Both hospitals will continue to cater for "90%" of the patients they currently receive. Key services including consultant-led maternity care will remain in situ, although the in-patient paediatric and major surgery units will be relocated elsewhere.
The health secretary continued: "I want Stafford to be a proper district hospital that continues to meet the needs of patients nearby, including for emergency care and births."
Sue Hawkins, speaking on behalf of campaign group Support Stafford Hospital, told Sky News the decision to keep consultant-led maternity services was "something - it's a start."
However, she added: "What I would say is that you can apply equally the same argument of patient safety used to justify that re-think to paediatric care, so we would ask for the downgrade of paediatrics to be re-considered as well."