In 1871, the Union purchased a 24-acre site on the slopes of Birch Hill and Starring Hill at Dearnley for £2,500. The following year, building work began on a large new workhouse.

In March 1873, the old Spotland workhouse partially collapsed, possibly because of subsidence due to an old coal-pit beneath the building. However, since the new workhouse was far from ready, the Spotland building had to be patched up and was used for another four yours. Even then its days were not over — in 1881, Rochdale Corporation were forced to rent it for use as a temporary isolation hospital during a smallpox epidemic.

The new workhouse, designed by George Woodhouse and Edward Potts, was originally intended to accommodate 632 inmates but by its eventual opening in November 1877, various extensions had increased the capacity to 847, including 29 officers. The total cost of the buildings and land was £85,000. The building was officially opened by the Mayor of Rochdale, Alderman T Schofield, on Wednesday 19th December 1877.
In 1902, a 172-bed infirmary was built at the north of the workhouse. It had a central administration block with male and female ward pavilions to each side.

During the First World War, part of the site was taken over by the military who also erected tents in the grounds.

In 1930, control of the site passed to Rochdale County Borough, with the Poor Law Institution being run by the Public Assistance Committee and the Hospital being run by the Health Committee. With the inauguration of the National Health Service in 1948, the site became a single hospital known as Birch Hill.

Birch Hill Hospital in 2001 was reviewed by English Heritage and it wasn’t granted a ‘listed’ building status, this lead to the uncertainty of the former workhouse. By 2012 the hospitals services had been upgraded and also transferred to local Infirmary. The land had then been bought and planning permission was granted for the Building of houses.