He's signed it at an event in Santa Clara County with other local leaders, families and service providers.
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"It will take us now a year to begin the process of implementation. We have seven counties that are committing themselves to the first phase. Every county in the state of California will be responsible for implementing this program," Gov. Newsom said.
The goal is to help people off the streets and into the care they need.
It was approved by the Senate and Assembly in August.
RELATED: Gov. Gavin Newsom announces plan to tackle homelessness in California
"We will start with counties large and small," he said.
He says the first phase will be supported by start-up grants of about $63 million. Newsom says the courts will receive some of those funds.
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The counties a part of the pilot program will receive the funds first, he said, adding "(this is) all unprecedented support for housing...support for a spectrum of services through our $14.7 million homeless proposal package, $11.6 million of community behavioral for health resources , a record amount of money."
Governor Newsom also said $1.4 billion will go to work force development to train social workers, counselors and staff.
"This is unprecedented support that we are committing to over the next few years to make this program work," he said.
The state says it gives those on the ground the ability to put those struggling into the system providing a court-ordered care plan.
Governor Newsom calls it new hope for thousands suffering from severe forms of mental health such as schizophrenia or other psychotic disorders.
It's meant to prevent more restrictive conservatorships or incarceration, and instead, stabilize and support this specific community.
The court-ordered care plans will be managed by a care team.
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It will provide everything from medications to housing plans.
But opponents say it infringes on people's rights.
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