It will now work up plans to build over 1,000 homes on the site in partnership with developer London Square.
Subject to planning consent, Peabody aims to begin building work by 2022 with the first affordable homes ready in 2026.
The 10-acre site provides a significant opportunity to deliver a mix of affordable and for sale homes, green spaces, a women’s centre and local shops on Parkhurst Road and Camden Road.
Peabody with architects AHMM will progress design work into early 2020.
The deal was secured with the help of a loan from the Mayor of London’s Land Fund. It will be paid back in full by Peabody to help bring more land forward for much-needed new homes across the capital.
Brendan Sarsfield, Chief Executive of Peabody said: “We are pleased to confirm we will deliver 60% level of genuinely-affordable homes integrating existing Islington communities with a new Peabody estate.
“As well as providing new homes we will also ensure social infrastructure and placemaking are at the heart of our proposals. We are pleased to be working with London Square which is a continuation of our longer term relationship across a number of sites in London.”