Initial plans are for an eight station dialysis unit which will dialyse up to 24 patients, with a view to expanding this number in the future.
This will mean that patients from the Northallerton area will be able to dialyse at the Friarage rather than travel to The James Cook University Hospital in Middlesborough.
The Friends of the Friarage intend to donate £300,000 for the unit's development work and purchase of equipment.
Dr David Reaich, consultant nephrologist, said the unit will improve patient experience for those needing dialysis.
"We are thrilled to be opening a renal dialysis unit at the Friarage," he said. "This development is great news for patients in the area as it will mean that they will be able to receive their dialysis a lot closer to home. Patients need to attend dialysis three times per week so this could make a huge difference to their quality of life by reducing travel time.
"We are extremely grateful for the support that the Friends of the Friarage and the community continue to show for our clinically led plans to grow the range of services available at the Friarage Hospital."
Donna Jermyn, Friends of the Friarage chairman, added, "It is really exciting that another new service is coming to the Friarage. The new unit will make such a difference to patients in this area who require dialysis. We are extremely grateful for the generosity of the public who continue to support us. Once again, we would really like the local community to get behind us and help in fund raising for the dialysis unit and future projects which will be announced in the coming months."
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