The facility will open in August at 95 Brunswick Street in Fitzroy, in Melbourne's inner-north, from Thursdays to Saturdays.
It will be run by the same consortium running mobile testing — Youth Support and Advocacy Service, The Loop Australia, and Harm Reduction Victoria.
The government said the Fitzroy location was close to popular nightlife hubs, public transport and health care and social services.
It said the facility would allow for the early detection and rapid assessment of new synthetic drugs such as fentanyl and nitazenes, and would provide a free, lifesaving service.
The medical support and social services would be provided by Melbourne Health and Youth Projects, while the University of Melbourne's Metabolomics Australia would run secondary testing to confirm the results of the substances.
"No drug is safe, but with testing and open, health-focused conversations, we are helping Victorians make more informed and safer choices," Mental Health Minister Ingrid Stitt said.
"Our pill testing trial has already shown young people want the information that could keep them safe and now we'll support even more Victorians with our fixed site service in Fitzroy."
Pillreports is a global database of Ecstasy" pills based on both subjective user reports and scientific analysis. "Ecstasy" is traditionally the name for MDMA based pills, however here we also include closely related substances such as MDA, MDEA, MBDB. Pills sold as "Ecstasy" often include other, potentially more dangerous, substances such as methamphetamine, ketamine and PMA.