The board of the trust agreed the move at a meeting on Thursday.
Around half of all care homes in Northern Ireland are set to close as part of the Transforming Your Care (TYC) programme, which was recently agreed by Health Minister Edwin Poots.
However the union Unite revealed on Wednesday that all nine homes operated by the Northern Trust are earmarked for closure by 2018.
Speaking after the board meeting, Health and Social Care Board chief executive John Compton said residential care may be the most appropriate choice for some older people, but is not what others want - and TYC is about providing a range of alternatives.
"The board supports the trend towards independent living at home focussing on helping people remain at home for as long as possible or in supported living accommodation and offering more choice and control about the type of care available to older people," he said.
"Supported living accommodation or 'housing with care' options are already developing.
We expect that over the three years to 2015, over 450 supported living places will be developed across Northern Ireland
"We need to move away from an institutional 'bed based' response to older people's care needs toward one which gives people 'their own front door' and better reflects most people's wish to live in a home setting."
The paper will go to consultation from 26 April to 26 July.
Unison said the first two homes to close in the Northern Trust will be Pinewood in Ballymena and Westlands in Cookstown in November, followed by Rathmoyle in Moyle in January next year.
They hit out at the scale of the closures.
Joe McCusker from the union said: "The proposal to close residential care homes leaves no NHS provision for residential care in the Northern Health Trust area.
"This will remove any choice for vulnerable people to be cared for in an NHS care home."
One resident at Pinewood, 87-year-old Mary King who has lived there for three years and requires 24-hour care, spoke of her shock and sadness at the news.
"The bottom just fell out of my world. It was a first class home," she told UTV, adding that there aren't many other care homes available in the area.
"They're making a big mistake, a really big mistake - because people like me really needed it. Where will they go and who will want them?"
The union UNITE said the situation is a "farce".
Kevin McAdam said: "This is an absolute disgrace and a farce that the Northern Trust will consult on the closure of all nine care homes. The Compton report makes it clear that transforming your care intends removing this elderly care from the National Health Service.
"This is only one piece of the transforming your care that shows it is nothing more than a means of privatising the NHS. Maybe TYC stands for take your cash."
South Belfast SDLP MLA Conall McDevitt said: "Today's decision is not a progressive one. It is short sighted and will in the long run be regretted.
The NHS matters to people here. The public do not want to see the private sector taking a lead role in health and social care delivery
"Today we renew our call on the Minister for Health to make a firm commitment to bring forward legislation to protect the health and social care system for privatisation."
East Antrim MLA Roy Beggs said the move could put vulnerable residents at risk.
He said: "The decision to close half the residential care beds within a three to five year period carries many risks for vulnerable residents and for our health care system.
"Any proposal to close them all will leave many of our most vulnerable adults with great distress and uncertainty. With the increasing reliance on domiciliary care, will there be sufficient respite care for the growing numbers of vulnerable constituents who will rely on the support from family and friends?"
Sinn Féin MLA Mickey Brady said: "The Northern Trust would appear to be proposing closing all their residential homes and while this is not going to happen immediately, I can understand that people currently living in these homes and their families are worried about the future.
"There appears have been a lack of consultation and information going to those who this decision directly affects and that is why the Chair of the committee Sue Ramsey has asked for an urgent meeting with the Northern Trust and Health departmental officials on Monday to find out exactly what is happening."