Persimmon started building work today on the first 307 homes at the former Llanwern Steelworks site, known as Glan Llyn.
During the next five years Persimmon in joint venture with regeneration specialist St Modwen will build 2,000 homes worth £300m at the site.
Longer term around 4,000 are planned over the next 20 years.
The start to work follows the completion of a new primary access road and 18 acre public park in the community.
By the end of the scheme the community will include a police station, supermarket, schools, a library and a doctor surgery together with 100 acres of play, amenity and sports space as well as park and lakes.
It will also include the 1.5 million square foot Celtic Business Park.
Cllr Evans the former steelworks was one of the most significant and largest brown field regeneration sites in Britain.
He said: “It is an important element of the city’s growth strategy and will provide many new employment opportunities as well as homes.”