Work demolishing the derelict 1960’s Billybanks Estate in Penarth finally got underway this week after years of delay.
Crest Nicholson said once the estate is levelled it would clear the way to start construction work in October on 377 apartments, which will be phased over eight years.
The notorious 329-flat estate was recently ranked the ugliest eyesore in Wales and eighth worst in the UK, although it is located in a prime location overlooking Cardiff Bay.
The agreement with the council stipulates that 20% of the homes will be affordable housing.
The original plan to turn the rundown 17-acre site into modern apartments was granted planning permission in 2007.
While most residents were relocated from the 17-acre site, four families refused to leave as plans stalled.
A public inquiry was called over compulsory purchase orders to move the residents, delaying the scheme which then fell victim to the housing downturn.
As part of the deal, cash will be put into public art, education facilities and road improvements.
Vale of Glamorgan Council leader Gordon Kemp said: “The development will provide a much-needed boost to the local economy, creating construction jobs and leading to the regeneration of the current estates.
“This remains a complex urban regeneration project, made all the more complicated by the recession.”