The first phase of the building development will see 377 homes built at Scotswood in the west end of Newcastle city centre.
Building work starts 13 years after the regeneration idea was first floated and neighbours who used to live on the site were told their homes would be demolished.
Residents were promised the first brick would be laid in 2002 but though the demolition took place, the building work is only just now beginning.
The project was delayed because mine shafts below the site had to be made safe. Then the recession meant funding delays.
The 60-hectare estate is being overseen by the New Tyne West Development Company, comprising Newcastle City Council, Barratt and Keepmoat.
The plan is to provide mainly family homes with over 60% being three and four-bedroom houses.
Duncan Bowman, Development Director with NTWDC, said: “We are at a point where house building can begin on this fabulous site.
“All those concerned deserve great credit for making this happen, not least the local residents who have shown great patience and support when things have taken longer than hoped – as is always the case on major projects such as this.
“The next few weeks and months will be exciting times for us all as we see a new part of Scotswood take shape.”