Contour Housing Group has selected Bramall Construction to build 93 family houses in St Mary's, funded by a £7.84m grant from the Homes & Communities Agency.
There will be 52 new homes for general rent and 41 designated rent-to-buy through New Build HomeBuy along with a neighbourhood park.
Vicky Carroll, group assistant director for housing at Contour, which is based in Salford, said: "The site was previously poor quality deck access flats and has been standing derelict for some time. Now the area will be revitalised with the development of new homes, landscaping, infrastructure and a public open space."
Contour and Bramall said they will be implementing plans for training and employment opportunities for local people.
Remediation work has now started on site and it is envisaged that the first homes will be ready for completion in 2012. Other contractors include architects Nichol Thomas, structural engineers Capita, project managers, Arcus and costing and planning supervisors the Simon Fenton Partnership.
The HCA funding is in addition to £1.47m previously granted for complex site remediation works.