The new site will feature 2,500 properties and is being built in Nigeria's north-eastern city of Maiduguri.
The camp - another sign that few expect the conflict to end soon - will house refugees occupying public schools, allowing classes to resume, hopefully next month, officials said.
Hundreds of thousands of children have not been to school for more than 18 months in Maiduguri and elsewhere in north-east Nigeria, where authorities closed all schools as they were targeted by the Islamic insurgents.
Boko Haram is a nickname meaning "Western education is sinful".
No-one knows how many refugees there are because most live with friends, family and strangers who have taken pity on them. Public grounds and the compounds of churches also provide refuge.
Some Nigerian officials have said there are about 200,000 refugees in Maiduguri, but Doctors Without Borders put the number at 1 million in August with hundreds arriving each week.
Boko Haram has killed tens of thousands of Christians during its six year uprising in the country.
President Muhammadu Buhari has said he wants all Boko Haram camps destroyed by the end of the year.
Even if that happens, the militants are expected to continue deadly hit-and-run raids and suicide bombings.