The £100m urban village scheme is being developed by Tirion, a not-for-profit organisation, initially created through a partnership between the Welsh Government and Principality Building Society.
Up to 1,000 jobs will be created during construction at the 53-acre former Arjo Wiggins Paper Mill site, in Canton, to the west of the city centre.
Work is just beginning on infrastructure for the scheme with building of homes to start in the Autumn.
The first phase of The Mill development will create 358 homes for open market sale by Lovell and 102 homes for Tirion which will be for discounted rent, open market rent and social rent.
An additional 340 homes for Tirion will be built in further phases as well as a neighbourhood centre with shopping and community facilities.
David Ward, chief executive of the Tirion Group, said: “This is a ground-breaking project which promises to be a blueprint for similar high-quality communities across the country.
“The fact that both open market and affordable homes are all being built by the same partner means we will achieve a consistent high quality across the whole development with no distinction between the different parts.”
Lovell managing director Stewart Davenport said the firm plans to work with the Construction Industry Training Board to establish a Cardiff-based National Skills Academy programme which will deliver apprenticeships and training placements for local people through The Mill scheme.