The Post Office is cutting off around a third of its free-to-use cash machines over the next 18 months, fuelling concerns over access to cash in rural and deprived communities.
The decision to switch off 600 of its 2,000 ATMs by March 2022 comes after the Bank of Ireland, which operates the network for the company, announced it was withdrawing from the business.
Customers will be instead encouraged to do day-to-day banking, such as paying in and withdrawing cash, over-the-counter in branches.
The Post Office will meanwhile invest £16million to maintain and upgrade the remaining 1,400 cashpoints available in branches.
Bosses said the machines earmarked for closure are little used, and are located near to other free cash facilities. Around 60 which have been deemed not commercially viable will be retained, because there are no nearby alternatives.
Martin Kearsley, banking director, said: "In the areas where we have been unable to sustainably operate the existing ATMs, customers can still withdraw cash over the counter free of charge and in a secure manner. Many of our branches are open long hours and at weekends, ensuring continued access to cash."
The Post Office said the £16 million investment will be focused on maintaining and upgrading existing cash machines, but it has not ruled out operating more ATMs in the future when new technology is in place.
The first ATM will be migrated to the Post Office estate towards the end of next year, with all machines transferring by the end of March 2022.
Cash use declined sharply at the start of the coronavirus pandemic, with some retailers asking customers to pay by alternatives such as cards. In central London it has fallen by up to 80%, according to figures published by Link, the cash machine network.
But many people still rely on cash and there are concerns that rural and deprived communities face being cut off.
The Government has said it will legislate to protect cash and one option is for cashback to become more widely available from retailers without people needing to make a purchase.
To support ATM maintenance, the Post Office has contracted software business Cennox. It will also use Vocalink to provide the transaction-processing services for Link, Visa, MasterCard and Post Office Card Account transactions at Post Office ATMs.
Richard Grimmer, managing director of Cennox UK and Ireland, said the Post Office's commitment "to invest in a diverse, free-to-use self-service network is a hugely positive announcement to the industry and the communities we serve".