Wates will partner the council in the major housing regeneration project that will include the building of up to 600 council houses to be funded and managed by the authority.
The Housing Partnership Programme includes over 40 sites across Cardiff split into three phases of development, with the first phase due to commence early next year.
Each phase of the project will be capable of delivering around 500 houses at a time and all three phases will be completed by 2025.
All the properties will meet high levels of sustainability and energy efficiency with a Passivhaus pilot project set to be delivered in phase one.
Cabinet Member for Health, Housing and Wellbeing, Cllr Susan Elsmore, said: “I’m delighted we have reached this important milestone in the Housing Partnership Programme in which the council will be investing up to £33m.
“With over 10,000 people on the housing waiting list this is an extremely important scheme that will play a key role in tackling Cardiff’s housing need. The project will also enable first time buyers to get that important first step on the housing ladder.
“The scheme will help revitalise areas of the city for the future by investing in sustainable communities as well as creating local jobs and training opportunities.”