At present, three respite homes are located in the North Island - one at Otaki on the Kapiti Coast and two in Auckland.
IDFNZ general manager Janet Simons said Bannockburn was chosen because of its central location, dry climate, and tranquil setting.
"Members and families from Nelson, Invercargill, and between will be able to access the home. The climate is wonderful as dry air is very good health-wise, and Cairnmuir is a lovely site," she said.
Respite care homes offer IDFNZ members and their families a place to stay away from the stress often felt in the primary home environment, she said.
The self-contained units sleep up to eight and are designed to take one family at a time.
"It is really time out for the whole family - to keep the family together as well as help the sick child recover from their illness. Families with children who have chronic illnesses are put under a terrible amount of emotional, mental, and financial stress," Mrs Simons said.
The $130,000 project to establish a home at Bannockburn has been in the making for about two years and will come to fruition next month.
Mrs Simons said the home, which had to be dismantled and freighted from the North Island, should arrive on site at the Cairnmuir Camping Ground about October 20.
It will be constructed, fitted out with appliances, furniture, and other household items, and should be ready for use before Christmas.
IDFNZ is appealing to local groups and organisations for help establishing the home within the community. Already the project has been sponsored by businesses and organisations throughout the country.
Mrs Simons said registered members booked use of the home through IDFNZ, which leased the camping ground site and arranged for the home to be cleaned and stocked with linen.
She hoped respite care homes would eventually be established in Nelson and Christchurch.