Preston City Council granted developers Galliford Try planning consent for 34 new homes in Preston.
Consent for the building of the houses will be on the site of the former North West Water Depot site in Ribbleton.
Plans show a mixture of two and three bed houses with access from Grange Avenue. Local housing provider Community Gateway Housing Association will assure the units will be made available for affordable rent.
The scheme, designed by architects Nicol Thomas, is set to achieve Code for Sustainable Homes Level 4 accreditation. Euan Kellie Property Solutions provided town planning advice throughout to Galliford Try.
Director Euan Kellie commented: “The proposals will represent sustainable development in a sustainable location and meet the key requirements of national and local planning policy.
“It will also make a vital contribution to the delivery of much needed affordable housing in the region.”
It us understood that construction on the site will begin in March 2014.
Galliford Try was previously awarded the £9m contract to design and construct the new car park at Preston railway station as part of a £90 million Network Rail package.