The Government in February began an initiative to target the country's 1000 most serious and persistent youth offenders with tougher measures.
Starting on October 1, the Youth Court will be authorised to send 12- and 13-year-olds to youth residences, with maximum terms doubled to six months.
The initiative, called Fresh Start, will cost $84 million over three years.
The 30-bed, 100-plus-staff Rotorua residence plays a key role.
The facility has a campus-based design of three 10-bed residential units, a secure unit, a self-care unit, cultural and sports halls and general support buildings. Employed staff include a chef, two cooks and 69 carers, including night supervisors.
Ms Bennett said the new residence in Rotorua meant young offenders from Waikato and the Bay of Plenty could stay local.
"By keeping young people close to family and whanau, we give them the best chance to rehabilitate and ultimately transition into work, education and home life," she said.
The facility had been built $15 million under budget, and would provide more intensive care for young offenders.
But a former Youth Court judge, Carolyn Henwood, said she emphatically disagreed with the plans, calling the new facility a "gateway to prison".
"When I first heard they were building it, I was quite shocked because I didn't think there was a need for another large institution."
Just weeks ago, an intensive eight-bed youth rehabilitation centre in Hamilton, which had achieved an 84 per cent success rate, was closed down for being too costly to run.
Ms Henwood said even 30 beds in one place was too many, and such institutions had never been shown to prevent reoffending.
"I'm not very hopeful about having large groups of young people together. It's not a good strategy. It's really a lock-up. It's a gateway to prison."
She said only a small handful of children committed most of the country's youth crimes, and they needed close individual care.
