TRUST chief executive Alan Foster hopes to make the massive savings through an initiative called Our £40m Challenge.
On the day that he announced that drastic measures will need to be taken, he also told how the University Hospital of Hartlepool will eventually close.
Services will either be incorporated in a planned £300m new hospital at Wynyard or moved to North Tees.
While accepting the £40m budget cuts will mean hefty job losses and changes to service provision he has vowed that there will be no compromise in healthcare provision.
The news comes just weeks after the health trust announced it was shedding a number of management posts in a bid to save money.
The trust will have to make £16m in savings during 2011-12, a further £14m in 2012-13 and a further £10m in 2013-14.
Moves are in place to achieve the first year’s savings by using one-off reserves but Mr Foster said that cannot be sustained.
Mr Foster said: “We now know that the challenge facing us amounts to some £40m over the next three years.
“In many ways we are in the same position as local government and other public services and, like them, this will mean we have some very difficult decisions to make.
“We have already started this process with a management review but this alone will not be enough to address our financial problems.
“Over the coming weeks and months we will, along with our commissioners, be getting into discussions with the public about how we can make services more cost effective.
“This will include centralising some services at one or another of our hospitals. If we don’t get a new hospital at Wynyard we are still going to have to centralise and the reality is that the centralisation will take place in Stockton.
“We have come so far in improving quality and cutting waiting times I am determined that there will be no compromise in these areas.
“There’s no denying that this is a difficult time for the trust, however we have to find ways to make considerable savings and bring in more income so we can meet this challenge.
“I have written to staff to explain the situation and launch our £40m challenge.
“This is the umbrella term we will use for every single thing that we do to save money or generate additional income.
“I am heartened by the fact that we have a committed and dedicated team of people working at the trust. If anyone can face this challenge, we can.”
He said that every aspect of healthcare within the trust would be scrutinised and hoped to keep the job losses to a minimum.
Amalgamating the two hospitals on one site would save money. But plans for a new hospital at Wynyard are part of a wider momentum: Pathways to healthcare programme.
That initiative, which also saw the closure of the A&E department at the Uinversity Hospital of Hartlepool, led to bitter protests, heated meetings and an eventual vote of no confidence in health trust bosses by Hartlepool Borough Council.
Trust bosses say the latest situation has arisen because of the wider economic situation and the changes in Government policy which aims to invest more money in the preventative and early intervention part of the health service and take money out of the hospital sector to pay for it.
Staff who can help with money-daving ideas are being urged to email firstname.lastname@example.org with their comments.
North Tees and Hartlepool NHS Trust was formed on April 1 1999 and became North Tees and Hartlepool NHS Foundation Trust on December 1 2007.
It provides hospital and community-based health care to around 365,000 people living in East Durham, Hartlepool, Stockton on Tees, surrounding areas and part of Sedgefield.