Bradford City Primary Care Trust has approved plans to build a new £6 million low-secure unit, subject to public consultation.
At a board meeting yesterday, members agreed the proposals would improve patient accommodation and benefit female patients sent outside the district for care.
Presenting the business case to the board, Bradford District Care Trust finance manager Rachel Dennison said the new unit would provide separate accommodation for those requiring acute care, offer much-needed facilities for women and improve arrangements provided by the outdated Kestrel unit on the site of Lynfield Mount Hospital.
The existing unit provided services on two floors, with separate living and sleeping areas, she said.
"That's just not the ideal situation and it's probably the only facility in the country that operates on that basis," she added.
The proposed £5.9 million low secure unit is likely to be built on the site of Lynfield Mount Hospital in Daisy Hill.
The 36-bed building would include an area to treat six mentally ill offenders, the first-ever separate area for women and 12 long-term high-dependency beds.
Part of the building would be devoted to preparing patients for life outside and developing links with the local community.
A ten-bed in-patient open forensic area would also provide beds for bail assessment and rehabilitation.
Daisy Hill residents have voiced concerns about the lack of consultation on the plans, but Miss Dennison said the plans were still at a very early stage.
Chief executive of Bradford City PCT Lynnette Throp added: "This is not a new cohort of patients.
"It's not to be seen as a new facility, it's just better accommodation for those we currently care for in Bradford and it gives us the opportunity to bring back people who have been cared for outside the district so they can be with family and friends."
The PCT agreed to provide £159,000 of the additional running costs.
Chairman Mohammed Ajeeb said they approved the development in principle subject to a consultation about the plan with the local community.
"There would be benefits and improvements for these patients if they are accommodated and served locally," he said.
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