I am sorry to hear about your health problems and hope that you make a good recovery.
Maybe medical retirement is the best option?
Sometimes, it can be. The employer has made efforts to continue your employment, presumably with safeguards and accomodations reflecting your health issues. This did not prove sucessful and they may now be searching for a more suitable arrangement. However, if you have an illness, and ongoing health problems and these problems make it almost impossible to fulfill your contracted role, then the employer is not obligated to continue employing you. This may seem harsh, but certain roles do require a certain level of physical fitness. While the employer is required to make every effort to accomodate an employee who suffers ill health, it is not always possible, or even safe to do so.
If you are medically retired, you may be entitled to additional years of pension and early access to the pension scheme, without actuarial reduction.
You may still be able to work, in another role, once you have taken retirement. Though, there may be some restrictions on the type of work you could do.