The latest New Zealand Health Survey found that only 48 percent of adults had visited a dental health professional in the past year and only 34 percent of adults in the most deprived areas had visited a dentist, he said.
University of Otago vice-chancellor Professor Harlene Hayne said it would make a real difference to people's lives and the community's health and wellbeing.
The university was committed to helping develop students into good citizens and this project would create a community-focused experience that involves thoughtful giving and service, Hayne said.
Not only will the Faculty of Dentistry regularly consult the community to find out what it needs, the faculty will also provide a wide range of outreach activities, she said.
Pro-vice-chancellor of the Division of Health Sciences, Professor Paul Brunton, labelled the clinic a win-win for both the local community and the university.
"Patients are contributing to the education of the country's future dentists and, in exchange, they have access to high-quality dental care."
The Counties Manukau dental teaching facility and patient treatment clinic will follow the long-standing social contract model operated successfully in Dunedin, where patients receive treatment provided by students under supervision at a highly accessible cost, he said.
Forty-eight final-year Bachelor of Dental Surgery students would be assigned to the clinic at any one time.
Brunton said the clinic was made possible because of a much-valued relationship with the district health board, which led to the two institutions signing a Memorandum of Understanding in November 2014 so they could achieve mutual goals.
"The new facility will not only provide students with diverse practical learning opportunities but also increase their understanding of people from a wide range of backgrounds," Brunton said.
Chief operating officer Stephen Willis said design work was already underway and work should start on the site later this year, with the aim of completing the project in 2020.
Counties Manukau Health's Director of Hospital Services, Phillip Balmer said he welcomed the new facility as a positive step towards addressing disparities in oral heath within the population.
"We recognise that poor oral health causes poor overall health, and we are always looking for service development initiatives to improve these indicators," Balmer said.
"There is a higher prevalence of tooth decay affecting Māori and Pacific communities within Counties Manukau and having a dental school in Counties Manukau will make it much easier for our community to access the care they need.
"People can also take their own steps to improve oral health by reducing sugar intake as an individual and as a family, taking care of their teeth through regular tooth brushing and seeking dental care if there are any problems."