The job to refurbish the listed Hallfield Estate has been beset by problems since work started renovating the first of 14 blocks in May 2012.
Problems with completing works on time prompted complaints from furious residents.
A report to councillors said: “External repairs and window replacements have been underway on the Hallfield Estate since May 2012 but progress has been exceedingly slow.
“Whereas completion of works to all 14 blocks was originally expected to take 127 weeks, works are only partially complete to 3 blocks after 85 weeks. Residents have regularly complained about the quality of work.”
The Council has now agreed a compromise agreement with Mulalley’s to end the contract.
Councillor Guthrie McKie, Labour spokesperson for Housing, said: “What a shambles. At the very start the Council should have appointed its own Manager to oversee the contract on a daily basis. The management and overseeing of the contract should have been given the highest priority so that problems could have been resolved as soon as they appeared. Hallfield residents are entitled to an explanation by the Council on why they allowed this contract to deteriorate to this level of incompetence.”