Admiral Construction of Chesterfield are the main contractors
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Work is starting on a new children's hospice to serve South Yorkshire and the north Midlands.
Bluebell Wood is being built at Dinnington near Rotherham after an original planning application for a site at nearby Balby was turned down.
The first sod of earth will by cut on Wednesday and contractors will be on the site shortly afterwards.
All the money needed to build and run Bluebell Wood is being raised through a series of public appeals.
About £3.5m has been raised so far towards the £4m building costs and the £1.8m a year it will take to run.
When the bulding is completed in about 18 months, it will provide accommodation and respite care for 200 young people.