News of the channel’s demise broke on Wednesday but the corporation only confirmed the news on Thursday morning.
A freeze in the Licence Fee and an expanding number of responsibilities including funding S4C and the World Service has left the BBC struggling to balance its books.
Under the management of Hall’s predecessor Mark Thompson, the corporation sought to salami slice budgets in order to maintain the breadth of services but some say the quality of output has suffered as a consequence.
Hall says axing the £85m per year channel would allow £30m to be invested in drama on BBC One which he had been concerned was “falling off in a way I was not satisfied with”.
A further £30m will be spent on BBC Three branded programmes which will be aired on BBC One and BBC Two after debuting on iPlayer.
Broadcasting capacity freed up by the move will be used to extend CBBC by an hour to 20.00 and to provide a BBC One +1 service in the evening.
In a statement Hall said: “I do believe, as I said only last week, that the BBC has taken incremental change as far as it can. Something has to give. And that means hard choices. But there is one choice I will never make – and that’s to sacrifice quality. And I believe that’s what the British public thinks too.”
The decision to axe BBC Three has been criticised by celebrities and some viewers who have organised a ‘Save BBC Three’ campaign.
The final decision to close the channel rests with the BBC Trust which will review Lord Hall’s proposals later this year.
