Saint John of God Community Services is to end its involvement in its disability and mental health services and transfer responsibility for their operation to the HSE.
The body said the decision was made due to a funding crisis.
St John of God's provides intellectual, disability and mental health services to more than 8,000 children, adolescents and adults across counties Dublin, Kildare, Kerry, Wicklow, Meath and Louth.
It employs 3,000 staff and volunteers in 300 locations. More than 2,500 of those affected are in receipt of day, residential and respite services for people with a disability.
The Order of St John of God has been providing these services for almost a century.
The body said there is a €27m annual funding gap and an accumulated deficit of €37.7m.
A figure it said would be higher but for the contribution of €16m by the order.
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The Chief Executive of St John of God Community Services, Clare Dempsey, said: "This is a day we wished would never come but in the face of an intractable funding crisis that has prevailed for over a decade, we simply cannot continue.
"We have endeavoured to resolve this over the years in talks with the HSE but without success.
"In February of this year, we advised the HSE that the extent of the financial crisis was so acute that if the accumulated deficit and current funding requirements were not addressed, we would be left with no option but to serve 12 months' notice to Terminate the Services Arrangement and transfer responsibility for the entirety of our service provision to them directly."
In separate letters to service users and their families and to staff members, St John of God's said it would do "everything in its power to manage the smooth transfer of service over the 12-month period and that its priority would be to ensure the least possible disruption in particular to its service users, their families and staff".
Responding to the announcement, the HSE said: "In the first instance, it is of critical importance to reassure service users, families and the public that these vital supports and services will continue to be provided without disruption."
It said it values the services provided by St John of God's and that it "will continue to work positively with SJOGCS in order to resolve the sustainability challenges that have been raised".
