Building work on 69 homes for West Bromwich-based Accord Housing Association is expected to start at the 2.1ha site in the new year making a start to the Eastern Gateway regeneration scheme.
All homes on the site will be built to Code Level Four of the Code for Sustainable Homes to reduce energy bills.
Alan Yates, group director of Regeneration for the Accord Group, said: “We are delighted to have secured this funding from the Homes and Communities Agency and we are looking forward starting work on this exciting development.
“This is a significant element of the regeneration of West Bromwich town centre and will create high quality, affordable housing for local people and we are very proud to be a part of it.”