The NHS is shutting down its gender identity clinic for children and young people at the Tavistock & Portman NHS Foundation Trust to build a "more resilient service" by expanding provision.
The NHS said on Thursday the contract for the gender identity service at the Trust will be brought to a close, and it will instead create two services led by specialist children's hospitals in London and the North West by spring 2023.
The final number is yet to be decided, but seven or eight services could be put in place.
It follows recommendations from Dr Hilary Cass, who is leading an independent review into gender identity services for children and young people.
She said there was a need to move away from a model of a sole provider, and instead establish regional services to better meet patients' needs.
The Trust, which runs clinics in London, Leeds and Bristol, is believed to give hormone treatment to around 200 of the thousands of children it sees each year.
Referrals have risen sharply in the last decade, with more than 5,000 in 2021-22, compared with less than 250 in 2011-12.
In March, an interim report of the Cass Review, commissioned by NHS England in 2020, was released.
In it, Dr Cass wrote: "It has become increasingly clear that a single specialist provider model is not a safe or viable long-term option, in view of concerns about lack of peer review and the ability to respond to the increasing demand."
It warned that many of those being referred have complex needs but that, once they are identified as having gender-related distress, other healthcare issues "can sometimes be overlooked".
It also said some health staff feel under pressure to adopt an "unquestioning affirmative approach", and recommended they remain open and explore the patient's experience and options.
One London-based service will be led by Great Ormond Street Hospital and Evelina London Children's Hospital, with South London and Maudsley NHS Foundation Trust providing specialist mental health support.
A second service in the North West will be led by Alder Hey Children's NHS Foundation Trust and the Royal Manchester Children's Hospital, with both trusts providing specialist mental health services.
These will take over clinical responsibility for and management of all GIDS patients - including those on the waiting list.
A spokeswoman for the Gender Identity Development Service (GIDS) at the Tavistock & Portman NHS Foundation Trust said: "The Trust supports the need to establish a more sustainable model for the care of this group of patients given the marked growth in referrals.
"The expertise that resides within the current GIDS service will be critical to the successful formation of these early adopter services and providing continuity in patient care.
"We will work closely with partners and commissioners to ensure a smooth transition to the new model of delivery.
"Over the last couple of years, our staff in GIDS have worked tirelessly and under intense scrutiny in a difficult climate.
"We are proud of them and thankful for their unrelenting patient focus and extraordinary efforts."
Former equalities minister and Tory leadership contender Kemi Badenoch described the decision as "profound".
She tweeted of having heard "personal testimonies of destroyed childhoods, protecting whistleblowing clinicians from endless harassment by twitter activists".
Ms Badenoch said women who had "serious concerns" had suffered "smearing [...] as terfs and bigots".
TERF refers to trans-exclusionary radical feminist, said to be a feminist who excludes the rights of transgender women from their support of women's rights.