Gov. Beverly Perdue and state health officials took part.
"It will embody a 21st century model for helping the mentally ill - and I believe will be a step toward safer and healthier communities for North Carolina," said Perdue.
The three-story psychiatric facility will cost $138 million, will be completed by the end of 2012, and will serve patients in 38 eastern counties - including those from Dorothea Dix in Raleigh that's closing.
"When we are under one roof, we're gonna be able to provide better and safer care for our patients," offered Cherry Hospital Director Philip Cook.
The new facility will also help administrators keep a closer eye on staff. There have been repeated charges of patient abuse and neglect in recent years. In one case, two employees were found guilty of abuse after punching and kicking a 30-year-old patient.
In another instance, a 50-year-old patient died after being injured and left sitting in a chair unattended for 22 hours while employees played cards and ate nearby.
The hospital says it has re-trained staff and adopted a zero tolerance policy against any type of neglect or abuse.
"Employees who want to do it the old way and do not treat the patients the way they need to be treated we need to deal with," said Secretary of DHHS Lanier Cansler.
While state officials say the new building will lead to improvements, others aren't so sure.
Disability Rights North Carolina called on Perdue and the General Assembly to halt the construction. Executive Director Vicki Smith said Thursday funds could be better used for community-based treatment instead of boosting demand for institutional care.
The state completed a mental hospital in Butner in 2008 and will begin a replacement for Broughton Hospital in Morganton in 2011.