Minister of Social Development, Paula Bennett, has opened a $47 million youth justice facility near Rotorua.
The 30-bed residence, just south of the city, will house 14 to 17-year-olds who have been sent there by a Youth Court judge.
Ms Bennett says young people from the Waikato/Bay of Plenty region can now serve sentences close to their families.
She says the facility was expected to cost $62 million but came in under budget, at $47 million.
Similar facilities are already operating in Auckland, Palmerston North and Christchurch, and the minister says the Rotorua centre brings the total number of residential places for young offenders to 146.