The building is used for children aged up to 18 with learning disabilities and/or physical disabilities, enabling their parents or main carers to have a short break knowing that their children are being cared for.
The refurbishment project follows a review into respite services initiated by the Health and Social Services Scrutiny panel and the UK charity Action for Children.
A ministerial decision was made in December to release the money for the refurbishment, which should be completed by the summer.
Health Minister Anne Pryke said that the project was the result of an excellent partnership between the public sector and the two charities.
