Plans for the 16-storey Beacon eco-development in Hemel Hempstead were first unveiled in 2015.
But construction never started and ultimately the debt held against the project was called in by its bridging lender.
The site was advertised by the receiver at £8.5m and Southern Grove exchanged contracts on the land last week.
Southern Grove will now partner with a housing association to provide 170 homes in a fully affordable scheme.
ECE Architecture will be designing the development and a planning application is expected to be submitted to Dacorum Borough Council this summer.
Tom Slingsby, CEO of developer Southern Grove, said: “Hemel Hempstead desperately needs more affordable homes and we’re proud to be tabling the latest in a series of projects for fully affordable schemes right where people need them.
“It’s great news for the people of Hemel Hempstead that development of this site will now make progress.
“All the units will be available at affordable rent or for purchase with shared ownership, and we remain determined to raise the quality of the finish that residents can expect from homes available through these initiatives.”