The Knesset Finance Committee this week approved nearly $500,000 annually to fund Sharon's treatment at his ranch in the Negev region, Haaretz said.
Administrators at the Sheba Medical Center in Tel Hashomer said the hospital would help the family by explaining the medical needs and equipment necessary to care for the former prime minister and instruct nursing and other medical professionals about his treatment.
Discussions about discharging Sharon to his family began two years ago, hospital officials said.
In a statement, the hospital said it "welcomes the family's decision, in the belief that it is better for 'Arik who belongs to all of us' to live his life at the ranch, surrounded by his loved ones and the scenery he loved, rather than in a room at the hospital."
Dr. Shlomo Noi, a hospital administrator, said Sharon's condition hasn't improved.
"The move is the result of modern medical thinking that prefers to see long-term patients treated in the community rather than in hospitals," Noi said.
Sharon, 82, has been a patient in the respiratory rehabilitation unit at Sheba since May 2006, after initially being hospitalized four months earlier at Hadassah University Hospital following a stroke. He has been diagnosed as being in a permanent vegetative state.