The new Research Institute for the Care of Older People (RICE) will be opened by the novelist and moved from St Martin's Hospital to its new home in the Royal United Hospital in Bath.
RICE will research the aging process and provide support to patients diagnosed with dementia.
Currently, there is a two-year study underway investigating the quality of life of people with dementia.
Pratchett, known for his Discworld series of comical fantasy novels, was diagnosed with a rare form of early-onset Alzheimer's disease last year.
Last week Pratchett personally delivered a petition with 20,000 signatures to Downing Street to call attention to the future of the disease in the UK in the next two decades.
In March, Pratchett gave a speech to the Alzheimer's Research Trust Conference where he donated $1 million to research and said he still wanted to write.
"You can't write books when you are dead, unless your name is L. Ron Hubbard," joked Pratchett in the speech.
There are approximately 700,000 people diagnosed with dementia in the UK.
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