Both the Nazareth Sisters and the HSE says there are no plans to shut the Nazareth House chapel in Sligo.
There had been reports that the chapel will be deconsecrated and closed.
The chapel, at Church Hill, is a popular choice by families and relatives as a place of repose and prayers for loved ones who pass away.
The HSE has leased areas at the Nazareth House, where it has received plannning permission for a new health care facility.
The work will include a new three-storey extension to the rear of an existing Nazareth House building, internal refurbishment and installation of a first-floor in a rear hall.
In a statement to Ocean FM News, the HSE says planning permission granted was for areas within a lease agreement between the HSE and the Sisters of Nazareth, which does not include the church.
The HSE says any decisions with regard to the church is solely a decision for the Sisters of Nazareth.
The Regional CEO of the Sisters of Nazareth, John O Mahony, is reported as saying the Sisters have no plan to close the church.
A traffic report in connection with the plannig application cited a belief that church services on the site were to cease and the building to be deconsecrated.
But the HSE says this was only an assumption by a traffic consultant.
The lease agreement between the Sisters of Nazareth and the HSE is for 99 years.