In a major step to address the youth justice crisis through Aboriginal-led initiatives, the Western Australian government has selected Marlamanu Pty Ltd to lead delivery of a pilot program for at-risk youth in the Kimberley.

It was announced Tuesday that a service agreement will be negotiated with Marlamanu which will see an Aboriginal-led diversionary program established at the Myroodah cattle station, 112 kilometres south east of Derby in the West Kimberley.

This follows the completion of the program design stage, aimed at providing up to 16 places each year for young men between 14 and 17.

The government said work is underway with agencies, including police and the departments of Communities and Justice, to refine the pathways for referrals to the program, including from the court system.

Earlier this year, the WA government allocated $15 million towards an on-Country residential facility for young offenders and has been working with Aboriginal leaders and other experts on the design of the Marlamanu program, which provides alternative rehabilitation pathways and builds on cultural strengths.

Damien Parriman, chief executive of Ambooriny Burru Foundation Group, the charitable wing of KRED Enterprises, said the announcement on Tuesday was the culmination of years of work.

"KRED Enterprises helped establish the Kimberley Aboriginal Pastoral Company and at that time we looked at opportunities to run social programs," he said.

"One of the programs is Marlamanu, the Walmajarri word for the process of looking after young people through ceremony, on Country, which facilitates using the pastoral enterprise as a way to engage young people to get them prepared for work and also away from some of the negative influences in towns.

"The idea was developed six years ago and there have been various iterations of the proposal. Last year the government showed interested and we provided them a revised and detailed proposal and engaged with them."

Mr Parriman said the program will create a safe environment for young people out on Country and use the pastoral enterprise to engage them and prepare for work and "participation in community life in a positive way".

"There are a lot of organisations that do great work with young people, but what I have heard from the young people is that the influences and distractions back home and in town undo that work," he said.

"Being able to have these young people with us for an extended period, away from those influences that contribute to antisocial or offending behaviour, allows us to do more work with that individual, understand their needs and what is driving that behaviour.

"Also, gaining an understanding of this young person's environment when they are in town, and starting to look at how we can assist and bring support to their family to help this young person succeed in life."

Mr Parriman said rising public concerns about the conditions in Western Australia's only specialised youth detention facility, Banksia Hill, was another driver of the program.

"It is important to understand the conditions at Banksia Hill and what spending time in Banksia Hill is doing to these young people, in addition to the mental health impacts, there is an increase in criminal knowledge from spending time in this place," he said.

It is expected the Marlamanu facility will open in the second half of 2023, with recruitment of the principal and detailed facility design to commence over the next few weeks.

The state government will also provide around $240,000 to Emama Nguda Aboriginal Corporation and Miruwung Gajerrong Aboriginal Corporation to progress planning and development of other safe place residential accommodation proposals in Derby and Kununurra.

Regional Development Minister Alannah MacTiernan, who made the announcement in Broome, said the government's commitment to the Marlamanu program aims to give youth offenders a genuine alternative to detention in the Kimberley.

"We are embracing the KRED vision of taking young offenders from the towns, onto a working pastoral station; where they can learn from Indigenous role models to build relationships of trust and responsibility, and benefit from physical activity and skill development," she said.

"These kids need to reset and learn about accountability. Developing strong connections to culture and country is a powerful tool on this journey.

"The McGowan government is focused on supporting communities to break the complex cycle of youth offending in our regions."

Kimberley MLA Divina D'Anna said the commitment to the Marlamanu diversionary program is an important step towards "trying to break the cycle of youth offending" in the Kimberley.

"I am hopeful this program will help transform young people's lives in the justice system, while keeping them closer to country," she said

"I believe with the right support, education and encouragement, youth offenders in the region can get their lives back on track."

The on-Country facility is part of a cross-agency $40.4 million package which has seen a range of programs and initiatives rolled out.

The $2 million Kimberley Community Action Fund has delivered grants to 12 local projects to engage youth and improve community safety over the next two years.

The rollout of Target 120 in Broome is also underway with more than 70 per cent of participants in Broome having had no further contact with police since joining the program.