Tallaght Hospital in Dublin has said that the creche at the hospital is to close at the end of August.
It follows the outcome of a review which was accepted by the hospital's board.
The Small World Creche has operated for about 11 years and has 50 children with a staff of 12.
In a statement, Tallaght Hospital said the review examined matters such as the operational, financial and environmental considerations that affect the running of the creche.
Staff were informed on 14 May and the hospital has engaged the services of a company that specialises in early childcare services, to help staff in accessing new employment opportunities.
The company has also been tasked with assisting parents whose children are in the creche in availing of alternative childcare.
A spokesperson for parents using the creche has said that parents are opposed to the closure and the disruption to the children.
Niamh Geoghegan said that parents were very satisfied with the standard of care provided and do not want to break up the cohesiveness between staff and children.
She said that childcare facilities will have six to 12 months to meet new regulations from Tulsa, the child and family support agency, if when published, the facility falls short.
Ms Geoghegan claimed the hospital was using impending new regulations as a reason to close the creche and creating problems where none currently exist.
She said that parents did not have sight of the report commissioned by the hospital board and that if there are genuine financial issues, parents are willing to consider a revised fee structure.