Healthcare group Priory has invested £1.25 million into a new mental health ward at its hospital in Edgbaston, creating 25 new jobs.
The new nine-bed 'Manor Ward' is treating patients with conditions such as anxiety, depression, obsessive compulsive disorder and bipolar disorder.
Priory Hospital Woodbourne said the expansion would enable it to cope with increased demand for mental health services and allow more people living locally to be treated closer to home.
Medical director and consultant psychiatrist Arshad Mahmood said: "This new private ward will allow us to look after more people who are perhaps in need of a slightly longer stay during their treatment plan, rather than simply coming to see our experts on a daily, outpatient basis.
"We will be offering a range of therapeutic options, developed to aid the recovery of our patients and to help them feel better quicker, in a discreet and nurturing setting."
The Priory said recent figures revealed that the number of people suffering depression in Birmingham and the Black Country was on the rise with around one in 12 adults living with the condition.
Hospital director Sally Yandle added: "Positive outcomes are at the very heart of the services we offer at Woodbourne and we are pleased that the new Manor Ward has given us the opportunity to reach out to more local patients in need of our specialist and expert help.
"We are all very aware of the need for greater resources and 'more beds' in the Midlands and as such we are proud that we are in a position to broaden our services so we can see more patients and help them in their journey towards a strong recovery."
Last year, Priory Healthcare opened a high street Wellbeing Centre in Birmingham city centre.