A medical research institute and clinical training facilities for student doctors will be established at the the new Bloomfield Private Medical Centre opposite Orange hospital.
It will create about 50 jobs with scope for more staff if extra funding can be obtained.
The new facility will occupy the first floor of the building currently under construction.
It will support the training of students in the joint medicine program run by Charles Sturt and Western Sydney universities.
It will also be the main site for the Institute for Regional, Rural and Remote Health and Medical Research.
The university will move into the site in the first half of next year ahead of the first intake of students in 2021.
CSU vice-chancellor Professor Andrew Vann said it was a major step for rural and regional healthcare.
"The new facilities will support the clinical education and placements of students in the Joint Program in Medicine to ensure the university trains highly skilled medical professionals ready to meet the healthcare needs of regional and rural Australians," he said.
Professor Vann said establishing the university's training and research facilities at the new medical centre would allow it to maximise the opportunities the centre could provide.
"The research institute will collaborate with a range of partners in the health and medical education and research fields, many of whom already have a presence in the region," he said.
"The new medical centre will also provide our staff and students with access to state-of-the-art facilities and clinical trainers."
The Forest Road site will also house the Orange Private Hospital on two floors to be run by Dr Bill Mackie and the Orange Surgery Centre.
It will move from its McNamara Street rooms of the past 17 years into the complex early next year with an expected opening date of around Easter, which is in April next year.
Zauner Construction managing director Gary Zauner said the first floor of the BPMC Tower, a medical centre for doctors and allied health rooms, was due to open in November.
Frank O'Halloran, a director of the building's joint developers, James Richmark said he expected the BPMC would be fully leased once construction was completed.
"I am excited by the university's decision to join the new Bloomfield Private Medical Centre in Orange, and to see what this will do for medical education in the region" he said.
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