David Wilson says the panel is to report back to the government with recommendations to improve the Involuntary Psychiatric Treatment Act.
The review will be headed by retired Supreme Court of Canada Justice Gerard La Forest and Dalhousie University law professor William Lahey.
The review panel will consult with district health authorities, mental health organizations and communities across the province.
The Health Department says an interim report is expected this winter and a final report is expected to be completed by next summer.
In place since 2007, the act helps people who have a severe mental illness receive appropriate treatment.