The council hope the new homes will become “the blueprint for modern house construction in London”.
The homes are made of pre-made panels manufactured in an off-site factory before being winched into position and assembled on site in days.
A pilot scheme is set to start at the Spring Vale Estate in Brook Green where 12 new homes of various sizes will be built using the technique.
A further seven sites have been identified and could lead to the construction of up to 100 new homes.
Cllr Andrew Johnson, cabinet member for housing, said: “This is an innovative way to provide quality homes, fit for modern living at affordable costs.
“Hammersmith & Fulham is one of the most densely populated boroughs in the country but there is a distinct lack of housing for the middle market.
“This scheme will lead to the construction of exemplary family homes that can also fit into tight urban spaces and is perfect for a congested city like London.
“This council is committed to creating a borough of housing opportunity, where decent, hard-working local residents can fulfil their housing dreams and purchase a property for a reasonable price.
“If other local authorities were to follow our lead and build homes like this on their own land it would have a significant impact London’s housing crisis and could help thousands of people into home ownership.“
The council is now looking to establish a framework for innovative house building using modern methods of construction with City Homes Projects Limited which is a subsidiary of Rational House.