We show that in a gas of ultra cold atoms distance selective two-body loss can be engineered via the resonant laser excitation of atom pairs to interacting electronic states. In an optical lattice this leads to a dissipative Master equation dynamics with Lindblad jump operators that annihilate atom pairs with a specific interparticle distance. In conjunction with coherent hopping between lattice sites this unusual dissipation mechanism leads to the formation of coherent long-lived complexes that can even exhibit an internal level structure which is strongly coupled to their external motion. We analyze this counterintuitive phenomenon in detail in a system of hard-core bosons. While current research has established that dissipation in general can lead to the emergence of coherent features in many-body systems our work shows that strong non-local dissipation can effectuate a binding mechanism for particles.