The new home involves three Georgian terrace properties being converted into one 15- bedroom house. This is the charity's ninth home away from home and the first the charity has set up in London.
Building work began this week and the home should be open by autumn 2010.
The home will be called Paul's House after Paul O'Gorman, who lost his battle with leukaemia in 1987. The Children with Leukaemia charity, that was set up by Paul's parents, is one of a number of contributors that together raised £4.6m to fund the building work.
Anna Kendall, Clic Sargent's home from home project manager said: "Paul's House will give families from across the South East access to family-friendly, comfortable accommodation free of charge so they can be near to their child when they are receiving treatment for cancer at UCH."
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