Portsmouth City Council revealed the facility will be built on the site of Wymering Community Centre, which burnt down in 2006.
It will cater for up to 40 pupils with autism or social communication difficulties.
Councillor Hannah Hockaday, cabinet member for education said ‘I’m thrilled that we have the funding in place for a new school. It will have a positive impact on the availability of school places for children with special educational needs and disabilities in the city.
‘The new school will support young people throughout their education including post-16 and help give them the best possible start as young adults.’
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The council put in a joint bid with Hampshire County Council to the Education and Skills Funding Agency.
In a statement the city council said: ‘These children need more specialist support and interventions than mainstream schools provide and there is a growing need for this type of specialist provision in the city.’
The news has been welcomed by education experts in the city who say it is a key stepping stone to providing youngsters with a brighter future.
Tricia Lyons, runs Marvels and Meltdowns, a Gosport-based charity catering for children with attention deficit hyperactivity disorder (ADHD) and autism.
She said: ‘This is going to be an immense relief for families with autistic children. It’s great news.’
Dr Beatriz López is part of the Autism Research Network based at The University of Portsmouth, and said special schools could really help needy youngsters to thrive.
She said: ‘Having a school like this can have a massive impact. Although autism is genetic, brain development can be influenced by the environment. So early intervention at schools like this can have a big effect.’