Tameside-based Bardsley Construction has started building 40 apartments for Liverpool Housing Trust and the Eldonian community, located off Vauxhall Road, north of the city.
Bardsley Construction won the £3.5m contract to construct the Sibert House scheme on Canalside Park in Liverpool in April.
Paul Strutt, managing director of Bardsley Construction, said: "This exciting new development highlights Bardsley's commitment to social housing. Our ability to deliver projects on time, to budget and quality has meant we have strong relationships with many housing associations, with whom we share the desire to provide much-needed properties."
Louise Ellman, Liverpool Riverside MP, said: "This important development will provide much needed new housing. I thank the Eldonians for their initiative and former Housing Minister John Healey for persuading the Homes & Communities Agency to give it the go ahead. This is part of Liverpool's regeneration."
Tony McGann, chairman of Eldonians, added: "The Eldonians see Sibert House as the starting point for the regeneration of North Liverpool. We are happy to continue to develop schemes which will provide a high percentage of much needed affordable social housing in this area."
Eldonians is a community-based housing association.