A new mental health unit being built in South Auckland could not come at a better time.

The government's approved $23.6 million of funding for a $54 million acute facility for the Counties Manukau District Health Board, who are paying the balance.

The 76-bed unit will replace the existing 52-bed Tiaho Mai facility at Middlemore Hospital.

The DHB's General Manger for Mental Health and Addiction, Tess Ahern, says those extra beds are needed.

"Our population has grown significantly and our current capacity just doesn't support the need that we have in the community."

The new facility's expected to open in August 2018.