More than $22 million in federal and provincial funding has been announced for the facility.
It will offer reasearchers the chance to study the impact of oil spills in sea ice and look into issues facing Arctic marine transportation.
The centre will bring together researchers from Manitoba, as well as the universities of Calgary, Victoria, Laval, Dalhousie and Washington.
Federal government departments will also be involved.
David Barber, an associate dean at the University of Manitoba, will lead the research.
Total cost of the observatory is around $31 million.