The SeaGrow is set to replenish meadows on the reef in a 100km radius of Gladstone in central Queensland.
The role of seagrass is considered "absolutely critical" in sustaining the reef and supporting the health of coastal habitats.
Seagrass is a key food source for endangered dugongs and turtles while acting as a filter to remove pollutants like sediment and excess nutrients from the water.
It also stores 400 million tonnes of carbon which is the equivalent weight of eight Sydney Harbour Bridges.
The world's first large-scale seagrass nursery will help restore healthy Barrier Reef ecosystems. (Supplied by Great Barrier Reef Foundation/AAP PHOTOS)
But the impacts of climate change in north Queensland are wreaking havoc on seagrass as it cannot recover from frequent storms, flood and cyclones.
The new nursery is set to help build resilience against weather disasters.
Healthy seagrass seeds are obtained from adult plants that were collected from the meadows in the Gladstone Harbour and maintained in the nursery which then produce flowers and tiny seeds.
Citizen scientists and school groups also go out and collect seagrass flowers for the nursery, which are held in big nets where the seeds drop into tanks to be harvested.
The nursery hopes to become less dependent on collecting from the wild and instead produce the seeds themselves, Coastal Marine Ecosystems Research Centre director Emma Jackson told AAP.
"There'll always be a little bit of the natural flower collection that needs to happen, just to make sure we mix up the genetics a little bit and keep getting a fresh supply, and don't create some sort of monoculture," Professor Jackson said.
Researchers at the nursery have also figured out how to trigger seagrass to flower multiple times a year by changing the climate in the tanks, to make it think it is winter before warming it up like the change to summer, to spur blossoms.
Different tanks - shaped like a raceway to mimic the ocean's movements and circulate water from the harbour - also have separate populations from different areas of Gladstone which are adapted for different environments.
Seagrass from the Gladstone nursery is hoped to help restore meadows beyond central Queensland. (Supplied by Great Barrier Reef Foundation/AAP PHOTOS)
The seagrass plants live in the tanks like a regular nursery and once the flowers are grown, they are snapped off for seeds to be collected.
The seeds are then taken out and planted in struggling seagrass meadows that haven't recovered from weather events.
The seeds are so tiny that researchers have come up with innovative ways to plant them and encourage germination, using a marine clay that mimics the sticky balls dugongs create when they spit out seagrass.
CQUniversity's nursery, jointly funded by the Great Barrier Reef Foundation and Coles, is set to replenish seagrass meadows in Gladstone before hopefully expanding to other locations.
"This new expanded seagrass nursery will see restoration scaled up significantly using an innovative seed-based method pioneered at the facility, to help repair critical ecosystems whilst unlocking the Great Barrier Reef's potential to mitigate the impacts of climate change," Great Barrier Reef Foundation's Will Hamill said.