A €2 million facility tailored for the needs of residents aged under 60 will be built at the St Vincent de Paule residence.
The centre, Narċis, is aimed at younger residents - primarily people with a disability - who have so far been living with elderly residents at the main facility.
The project will include the development of a specialised multi-disciplinary programme tailored to younger patients' physical and psychological needs, and is being put forward as a step towards residents reintegration in society.
There are currently some younger 16 residents at St Vincent De Paule.
"The ultimate goal is for every person to be living in their own home in their community," Prime Minister Joseph Muscat said while unveiling the project on Tuesday.
"This should not be seen as a final destination or just another ward at St Vincent de Paule, but as a point of transition for people who have spent years living in a facility that was not directly aimed at them.
"We also recognise that some people, because of their needs, will be living here for the rest of their lives, and so it is important that the centre feels less like an institution and more like a home."
The setting-up of the centre follows a study carried out with stakeholders including Mater Dei Hospital and the national disability commission, which identified the need for a specialised program for physical and social rehab.
Residents will have access to medical and psychological professionals as well as family therapy and social capacity building, and a transition period focusing on inclusion and independent living.
Services will also be available on an outpatient basis.
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