The Barbie maker will produce the not-for-retail doll following a social media campaign.
Mattel's hairless fashion doll will be distributed exclusively to children’s hospitals and other hospitals treating children with hair loss in the US and Canada.
The doll, who will be a friend of Barbie's, will come with wigs, hats, scarves and other fashion accessories which will be made available to offer girls a traditional fashion play experience.
In a statement, Mattel said: "We made the decision not to sell these dolls at retail stores and profit from them, but rather more directly and immediately get these into the hands of children who can most benefit from a play experience with these dolls.
"This decision demonstrates Mattel’s commitment to encourage play as a respite for children in the hospital and bring joy to children in need. Mattel’s ongoing commitment to extending play to children occurs through our dedicated support of a variety of children’s organizations and needs through a multitude of philanthropic activities."
To date, the Beautiful and Bald Barbie! Facebook group has attracted over 150,000 Likes while its associated petition has attracted close to 35,000 signatures.
The group's mission statement reads: "We would like to see a Beautiful and Bald Barbie made to help young girls who suffer from hair loss due to cancer treatments, Alopecia or Trichotillomania. Also, for young girls who are having trouble coping with their mother's hair loss from chemo. Many children have some difficulty accepting their mother, sister, aunt, grandparent or friend going from long haired to bald."