The programme will be replaced by local systems, although national infrastructure will be retained for some applications, the DoH said.
These include Choose and Book, the Electronic Prescription Service and the Picture Archiving and Communications System.
Health minister Simon Burns said the changes made practical and financial sense.
'Moving IT systems closer to the frontline will release £700m extra in savings,' he said. 'Every penny saved through productivity gains will be reinvested to improve patient care.'
Dr Chaand Nagpaul, IT lead on the GPC said that giving NHS organisations more choice of IT systems made sense. But, he added, problems could arise from a more localised approach.
'There still needs to be some central accountability to ensure consistent and equitable delivery, manage local implementation, avoid wasteful duplication of effort, and support local decision-making,' he said
'For example, a nationally accredited list of systems would be helpful.'