The £120m deal will see 1,245 council homes refurbished, and the construction of 388 new council homes to rent with environmental improvements to the estates.

It is the first housing PFI scheme of its kind with the private finance element being secured through the capital funding market markets through a bond issue.

Leeds City Council and sustainable communities for Leeds (sc4L) signed the 20-year partnership deal, which will rejuvenate local communities across the Little London, Beeston Hill and Holbeck areas of the city.

The sc4L consortium, comprising Cyril Sweett Investments, Keepmoat Investments and Lloyds Bank Corporate Markets.

Councillor Peter Gruen, Leeds City Council executive board member with responsibility for neighbourhoods, planning and support services said: “We welcome the news that this project has reached financial close.

“I am very pleased that we can finally start to deliver the project for these communities, who have waited a long time. I want to thank the residents for their continued patience, now is the time to finally deliver results!

“The council has worked extremely hard with its partners over many years to move this project along at the various stages. It is great to sign it off and be able to tell local people they will start to see work happening soon.”

Plans to regenerate Little London, Beeston Hill and Holbeck have been on the council’s drawing board for nearly a decade.

Work on the current scheme was due to start earlier this year until the Government decided to shift its financial goalposts and stipulated the scheme could not be financed by bank borrowing.