Twenty Devon County Council care homes are to close in a bid to slash social care spending by £10.7m.
More than 750 jobs could be lost and 260 residents will be moved into private care homes over the next 18 months.
Another 250 jobs could go in council run day centres as the authority closes 17 of them to save £1.7m a year.
The union Unison said it would be challenging the "shocking example" of "devastating cuts".
'Confusion and anxiety'
Only two council-run residential care homes, with specialist dementia facilities, will remain open - in Newton Abbot and Torrington.
The Conservative-controlled council, which is trying to cut its spending by a third to £400m a year by 2017, claimed its own homes are too expensive to run.
Unison spokeswoman Joanne Kaye said: "This shameful decision made by Devon County Council is yet another shocking example of the devastating cuts being placed on the shoulders of the most vulnerable people in our society.
"These vulnerable adults are likely to face confusion and anxiety about today's announcement and the council will be left without a valuable and crucial service."
The Association of Public Service Excellence, in a report commissioned by Unison, said "no consideration appears to have been given" to reducing costs.
The authority said where it pays private care homes up to £426 a week for a care bed, its own homes cost on average £903 per bed per week.
Residential care costs the council nearly £70m a year, of which £18.2m, nearly 30%, is spent on its own care homes services.
Devon already buys 90% of the residential home places it needs from the independent and private sectors.
Councillor Stuart Barker, Cabinet member for adult social care, said: "This is not a process that is going to happen overnight.
"We are going to take our time and we will be working very closely with the families and treating relatives in our care homes with the dignity and respect they deserve to make sure they have a home of their choice."
Doris Kirk, 88, is a resident at one of the homes earmarked for closure, Davey Court in Exmouth.
Her daughter Trish Smethurst said: "She will be devastated.
"The people that work there are brilliant. They treat her like she is their own mother."