It includes seating areas, a maze and play equipment and has been designed to help children recover from treatment.
A therapy zone includes sloping floors and artificial grass so children can receive physiotherapy in the fresh air.
The garden had Â£1.6m in funding from the Welsh Government and Â£250,000 from the Noah's Ark charity.
Part of the garden has a jungle theme with a spray-painted mural and palm trees - during the evening the space is lit by colourful LED lights.
Although each ward in the the Noah's Ark Children's Hospital for Wales has an indoor play area - until now the children did not have a dedicated outdoor space.
Senior nurse Jo Clements said: "It's got a lovely vibe. Some of the elements are for rehab and physio - different surfaces, different sensory components.
"But there are also parts that are very typical of a playground - a slide, a playhouse where children can just be children again giving them a sense of normality."
Five-year-old Neve from Abercynon added: "I really like it... there's lots and lots of stuff here"
Neve was admitted seven weeks ago after suffering what her parents thought was a sickness bug.
But she was diagnosed with an inflammation to the brain called Acute Disseminated Encephalomyelitis which caused her to lose control of the left side of her body .
Neve receives daily therapy to help her regain full control of her arm and leg.
With the help of physiotherapists she uses the garden to practice walking and to develop her wheelchair skills.
Physiotherapist Natalie Gragasin said the garden can also make therapy seem like play.
"It's a great place for her to come to spend time with her family - obviously when children are in hospital for a long time they're often away from their siblings so it's a lovely place for children just to be children together."
The children's hospital opened in 2006 and the second phase of its construction was completed in 2015.
Funding from the Welsh Government paid for construction work and the equipment has been provided by donations to the Noah's Ark charity.
Bethan Simmonds, of the charity, added: "At the end of the day this is a children's hospital and children have a right to be children whatever they're going through."
The garden will be officially opened in a event led by Health Secretary Vaughan Gething.
Patients at Wales' only children's hospital can play outside for the first time - thanks to a new purpose-built garden.