"This $27m facility shows this government is delivering on its promise to boost mental healthcare and improve frontline services", Mr Doocey said.
It will be on the terrace alongside Te Nikau Hospital. The contractor is being finalised and building should start in mid-August, with completion due in late 2026.
It will have six beds, a seventh high-care bed, and beds and sections of the facility can be secured if needed.
Mr Doocey said it was the first sod he had turned since beginning as the country's first mental health minister.
"Budget 2024 saw an uplift of $7m approved to ensure the new mental health facility could proceed.
"This new build will improve the quality of specialist mental health services here on the West Coast by providing a modern space that supports contemporary models of care."
Poutini Ngai Tahu blessed the site before placing the mauri stone.
Iwi gifted the new facility the name Nga Moana e Rua, which echoes the original name of the Blaketown lagoon and "Lake Karoro", which the new unit overlooks.
Health NZ regional head of infrastructure Mr Ojala said the new facility was the result of many hands and hearts coming together.
The facility will also have whānau spaces, flexible therapy rooms and a specially designed functional outdoor courtyard for connecting with nature.
Mr Doocey said the new design approach won two awards in Christchurch, and the facilities helped create an environment that supported mental well-being by creating homely spaces.
People with "lived experience" of mental health problems had input into designing the Greymouth facility.
"Providing support earlier and preventing people from reaching the point where they need inpatient care is one of my priorities. However, we know there will always be people who require specialist inpatient services. It is vital we continue to deliver on improving our mental health infrastructure, so people get the high level of care they need, irrespective of where they live."
A priority for him was increasing access to timely care, and growing the workforce.
