The first stage of the $23 million upgrade will become operational on February 3 and include five additional beds for patients requiring mental health treatment and emergency medicine.

"This is part of the response to providing timely emergency department care," Minister for Health Simon Corbell said. "It is not the only part of the puzzle, but it is an important part."

According to the government, the expansion will increase the capacity of the emergency department by 30 percent once it is completed later this year.

Last year, Canberra emergency departments recorded their busiest year on record with staff treating nearly 130,000 patients during 2014-15, or an average of 357 presentations a day. The number of people visiting the departments has increased by 22 per cent since 2009-10, despite the territory's population growing by 9 per cent.

Mr Corbell has previously described the extension was a short to medium- term response to Canberra's growing population, although it is expected to deliver immediate results.

"We know that our emergency department continues to face big increases in presentation," Mr Corbell said.

"We have to continue to improve timeliness in access to care and improving capacity of the emergency department is part of that response."

In February, construction will begin on a $5 million paediatric streaming function with a separate waiting area and two consultation rooms for children and adolescents.

Canberra Hospital chief executive Ian Thompson said the hospital may need to recruit additional staff in coming months to ensure quality of care standards,

"This [extension] provides a much better environment for the staff with natural lighting and it also makes the experience for patients better," he said.

"We've got more space in the individual treatment areas which is also a very important feature for staff to get around patients to provide the care they need to provide."

Mr Thompson said the new mental health facilities would allow specialists to provide appropriate care in a busy emergency department.

"What we currently have in an assessment unit where you see what their further care needs are, but what we don't have it a short stay unit where we can transfer people who need a slightly longer period of care"

Mr Thompson said those presenting with behavioural disturbances or potential mental health illnesses could be assessed and treated separately within the emergency department, and transferred externally if required

Mr Corbell said he was delighted to see the short-stay mental health facilities within the emergency department, which would provide better care and conditions for all.

"All too often, unfortunately, we see far too many people coming to our emergency department who are suffering the burden of mental illness and a presentation at the ED is particularly difficult," he said.

"The current mental health facilities are not what I think should be available for people who present with an acute episode of mental illness.

"We need proper modern and human facilities and we have that now with this short-stay mental health unit."