Social Development Minister Madeleine Dube says the 15-bed facility will be the first of its kind in the province.
She says the private sector will supply the facility while the province will provide the clinical services.
Dube says the facility will improve the quality of life for the children and youth because they'll be able to get treatment close to home, family and friends.
The facility was recommended more than two years ago in a report by the province's then child and youth advocate.
At the time, Bernard Richard said children and youth with the most complex needs were falling through the cracks.