The grade two-listed Hartford Mill, which was built in 1907, is being demolished to make way for 68 homes at the site on Edward Street.
The council received approval for the complete demolition of the Mill, which has stood vacant since 1991, in January 2019. TFM Demolition is carrying out the work.
The mill is privately owned by Barry Parker who is in the process of finding a buyer for the site.
Cllr Sean Fielding, leader of Oldham Council, said: “Hartford Mill is a landmark but it had become a death trap and was causing issues in the neighbourhood with anti-social behaviour and arson attacks occurring regularly.
“This site will provide much-needed new housing for the future. The council does everything it can to support building on brownfield land, to reduce pressure to build on the greenbelt. This site is a great example of that.”