The $25.2 million program has been modelled on a Victorian system operating since 2006, which will see the Department of Health partner with the nurses' union to launch the national service next year.
"This is about providing a familiar front door for nurses and midwives to be able to talk about their mental health concerns to their peers who just get it," Assistant Health Minister Ged Kearney said.
The free and confidential service will be available to all nurses and midwives, including students, and will provide face-to-face case management for health and wellbeing.
"It's still very difficult in healthcare settings for nurses and midwives, as they continue to respond to the pandemic," ANMF federal secretary Lori-Anne Sharp told AAP.
"So many are exhausted and traumatised and experiencing that moral distress and burnout basically from not having enough staff because of the pandemic."
While the service is a positive step, Ms Sharp said it doesn't address the cause of the exhaustion in the workforce.
"Just because it doesn't do that, doesn't mean we shouldn't provide it," she said.
"So what we currently need to do is retain the precious resources of the staff that we have."
Ms Sharp said the service will hopefully help with staff retention, however wage rises and safe workloads will provide the greatest relief for burnt-out nurses.
"There has to be a certain amount of patients per nurse so that they can actually have the time and resources to deliver the care that's required," she said.
The service will aim to have four centres set up across the country by the end of next year.
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