Canada is investing $48 million over the next eight years to create a national public umbilical cord blood bank to help gravely ill Canadians who need stem cell transplants.

The announcement was made Monday in a joint statement by the provincial and territorial ministries of health. Quebec will not take part in the project, as it runs its own cord blood banking program through Hema-Quebec.

If all goes well, a cord blood bank will be up and running in Ottawa within two years, and then expanded to other major Canadian cities over the next four years, says Sue Smith, the executive director of OneMatch Stem Cell and Marrow Network at Canadian Blood Services, which will be managing the cord blood bank.

"Canada is one of the few G20 countries to not have its own national umbilical cord blood bank," she told CTV.ca.

"Canada has this unique mixed-race ethnicities and aboriginal populations. That's why we're going to be targeting those folks in particular."

Umbilical cord blood is a rich source of stem cells and has the advantage of producing fewer complications in transplant patients than other sources.

When patients require stem cell transplants, they have the best chance of finding an appropriate donor from within their own family. But about 70 per cent of patients must look outside of their families for a match. It's hoped that the umbilical cord blood bank will help such patients improve their chances of finding a finding a blood sample that will make a good match.

"Currently, more than 800 Canadian patients are in need of a blood stem cell transplant to help them combat life-threatening diseases such as aplastic anaemia, leukemia, and other blood related and immune disorders," Dr. Graham Sher, the CEO of Canadian Blood Services, said in a news release.

"Umbilical cord blood is a high-quality source of stem cells and a national bank will create a long-term supply that will help reduce Canada's dependency on internationally sourced units."

The cord blood bank will be stocked with umbilical cord blood donated anonymously by the parents of newborns. The donations would then be available for any patient in need.

The bank will be developed and managed by Canadian Blood Services on behalf of the provinces and territories. Over the next eight years, the bank will strive to achieve a target inventory of 20,000 cord blood units.

Smith says even with the donations, there will still be a need for bone marrow donors, as well as stem cells donotions from adults.

"We're also still going to need some cords from international sources," she said. "There isn't a country that's totally self-sufficient in stem cells. But this will help us where the gap is greatest, which is those hard-to-match patients -- in particular, multiethnic patients."

The procedures required to achieve the national public umbilical cord blood bank will be developed through the pilot blood bank in Ottawa. At the same time, a cord blood stem cell laboratory will be established at Canadian Blood Services' facilities in Ottawa.

Phase 2 will see the project expand nationally to a number of Vancouver, Toronto and Edmonton hospitals, along with a second lab in Edmonton by 2016.

Canadian Blood Services will begin a public fundraising campaign over the next three years to raise $12.5 million of the $48 million needed for the cord blood bank.