Building owner Walsall Council signed a deal today allowing Accord to take control of the five acre site in Beechdale.
It will now set about converting the site into an assembly hub to manufacture timber houses, which until now were imported from Norway.
Once renovated, the factory is expected to manufacture enough panels to build around 150 new homes each year and create up to 30 jobs for local people.
Chris Handy, chief executive of Accord Group, said: “For a number of years now we have been building timber homes using panels imported from Norway.
“It is fantastic that we are now working with the Council to replicate this model in Walsall, in order to construct timber panels ourselves and produce low carbon housing for local people that is cheap to run.
“Importantly the factory will also contribute significantly to supporting the local economy, creating jobs for local people and reverse the decline in manufacturing in the region.”