Plans were drawn up to replace Huddersfield Royal Infirmary with a smaller site and centralise A&E services in Halifax.
The proposals, which would have seen more patients treated at an expanded Calderdale Royal Infirmary, sparked protests and safety fears over longer journey times to hospital.
In May, the former Health Secretary Jeremy Hunt ordered a rethink after the plan was reviewed by an independent panel.
Now revised proposals have been drawn up which include retaining 24-hour A&E services in Huddersfield and ambulance patients with life-threatening conditions being taken to Halifax.
A summary of the new plan said: "Huddersfield Royal Infirmary (HRI) and Calderdale Royal Hospital (CRH) will both provide 24-7 consultant-led A&E services.
"A&E at CRH will receive all blue light emergency ambulances for patients that have serious life-threatening conditions and all patients likely to require hospital admission following triage by the Yorkshire Ambulance Service.
"The A&E at HRI will receive self presenting emergency patients. All patients requiring acute inpatient admission will be transferred by ambulance from HRI to CRH - 24-7 consultant anaesthetic cover will be provided at HRI to enable the safe delivery of accident and emergency services."
The original plan raised fears that hospital beds would be reduced before enough alternative services were available in the community.
The summary document said: "The total number of hospital beds will remain broadly as they are now whilst services are developed in the community and demonstrate a sustainable reduction in the demand for in-patient hospital care."
It said public funding would be sought to carry out the plan instead of using the costly Private Finance Initiative (PFI), under which new hospital services are built by private companies.
Calderdale and Huddersfield NHS Foundation Trust, which runs the hospitals, must make Â£20.8m of savings this year in order to end 2018-19 with a Â£43.1m deficit.
Costly repayments on an existing PFI scheme used to build Calderdale Royal Hospital are one of the reasons behind the deficit.
The radical proposal, which has cross party support, follows concerns over NHS services in the district after changes were made to A&E services in Dewsbury by Mid Yorkshire Hospitals NHS Trust.
Coun Shabir Pandor, Leader of Kirklees Council, said: "We have written to the Secretary of State and to NHS England to say that we believe a new hospital in Kirklees will reflect a plan for the district and ensure the best healthcare in the future, whilst retaining services that need to be delivered locally in Huddersfield and Dewsbury."
A report released this morning by Kirklees Council said: "The development of a new hospital located in a suitable location between Huddersfield and Dewsbury to include full A+E services with the provision of critical care beds that will otherwise be lost entirely from Kirklees.