The six-month pilot will enable people to test drugs and pills free of charge, and provide advice on general, sexual and mental health via drop-in consultations with nurses.
The site will help weed out dangerous substances and provide an opportunity for harm reduction and counselling to encourage a reduction in drug use, says ACT Health Minister Rachel Stephen-Smith.
"This Australian-first program will help people who use drugs better understand or avoid unknown and potentially dangerous substances in illicit drugs," she said.
"We know the safest option is not to take drugs and this will always be our advice to the community.
"However we recognise some people will choose to use drugs and there is a need for initiatives that reduce the harms associated with drug use."
Directions Health Services will run the CanTEST Health and Drug Checking Service in partnership with Pill Testing Australia and Canberra Alliance for Harm Minimisation and Advocacy.
It follows two trials conducted by Pill Testing Australia at Canberra's Groovin' the Moo festival in 2018 and 2019.
Harm Reduction Australia and Pill Testing Australia President Gino Vumbaca labelled the pilot program a "public health breakthrough".
"No-one wants to see young lives lost and no-one wants to see the gut-wrenching grief that families and loved ones go through when this happens," he said.
He also called for a national rollout of the program.
"We encourage all governments to take up our standing offer, as the ACT government did in 2018, to deliver a festival-based pill testing pilot free of charge to demonstrate the effectiveness of our service," Prof Vumbaca said.
The site will be open from July 21 on Thursdays from 10am to 1pm and Fridays from 6pm to 9pm.
It comes as the ACT government prepares to decriminalise small amounts of illicit drugs including cocaine, heroin and MDMA.
The Labor-Greens government is backing a private members bill to give police the ability to fine someone caught in possession of illegal drugs rather than divert them through the criminal justice system.
A person could also choose to attend a drug diversion program as opposed to facing the $100 penalty.
It follows the decriminalisation of cannabis for personal use in 2019.
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