A new healing centre will be built on the Tiwi Islands through a $3.1 million investment from the federal government.

The Djurrupuwu Healing Centre is an initiative of the Djurrupuwu family group and will deliver culturally grounded health and wellbeing services designed by the Tiwi community.

The Yimpinari Aboriginal Corporation will manage development of the centre on the Jessie River on the north coast of Melville Island.

The facility will support Tiwi people facing alcohol and other drug use, mental health challenges, trauma and physical illness, combining Tiwi healing practices with western therapeutic approaches.

It will operate as a Tiwi-led, culturally informed service focused on self-determination and healing on Country.

Federal Minister for Indigenous Australians, Malarndirri McCarthy, said the approach reflects the strength of Tiwi-led care.

"This Tiwi-led approach to healing on Country is powerful and deeply important," she said.

"It allows people to stay connected with their families, culture and Country while receiving support in a way that respects Tiwi knowledge and values."

Senator McCarthy added it will also build long-term strength.

"The centre will help strengthen wellbeing and identity, while also creating opportunities for local jobs and passing cultural knowledge to future generations."

The centre will provide culturally informed recovery programs, cultural enrichment activities, support for healthier lifestyles and structured pathways to reconnect with community.

Djurrupuwu Traditional Owner and project coordinator Domonic Grant-Walakurrimerri said the centre represents a long-held goal for his family and community.

"This centre has long been a dream of ours," he said.

"This is a very proud moment for our Djurrupuwu family group, and for all Tiwi - taking control of our future, our way."

Federal Member for Lingiari, Marion Scrymgour, said the project follows a co-development model.

"Our government knows you get the best results by working with communities to co-develop services," she said.

"Tiwi people walk in two worlds, and by combining traditional Tiwi healing with western approaches in a setting that keeps them connected to family and Country we have the best chance for recovery.

"We're committed to keeping traditional knowledge and culture strong and this new centre will deliver on this promise through job creation and training opportunities."

The facility is expected to open in 2027.