After more than 10 years of work on the project, Challenge Southern Highlands general manager Tony McElhinney said it was a "relief" to finally see work begin.

A groundbreaking ceremony was held last month at the site on the corner of Anne and Cook Streets in Mittagong, where Challenge House will be built.

The house will offer transitional accommodation to residents with a disability who are looking to gain independence and develop the necessary skills to live alone.

At the ceremony, Mr McElhinney thanked several people who had "been key to the success of the project".

"We really appreciate the support of key individuals within the community who have supported and advocated for us, which eventuated in land and support," he said.

"We're here to support people in crisis - I don't think a parent should ever be put in the position to say they can no longer look after their child, and that's what this is all about: building skills for the future."

Mr McElhinney said a $900,000 Federal Government grant had been crucial to the project, however recent legislative inclusions in the plan meant more funds were needed for the project to be finalised.

"It's been a long journey, and I'll admit I've been, at stages, ready to give the money back because it's been so hard but everyone has rallied to say 'let's keep going, let's get this house built' and it's all finally about to start," he said.

The house is for people from the Southern Highlands who are capable of moving in to transitional housing.

Mr McElhinney said all support would be "incredibly appreciated".

"We're really calling for community support, with donations of building materials or tax-deductible cash donations to make sure we can see this project through to the end," he said.

For more information on the Challenge House project, visit www.challengesh.org.au/