The Homes & Communities Agency has awarded £5m to Manchester Ship Canal Developments to continue development of two apartment blocks at Eastbank in Ancoats.
Building work has already started by Russell Construction on 108 new homes, including 30 townhouses, at the development in East Manchester.
Manchester Ship Canal Developments is a joint venture between Peel Land & Property and Manchester City Council.
James Whittaker, Manchester-based Peel's development director, said: "This is an outstanding regeneration project and is testimony to our long working partnership with the city council. We share the same objectives of wanting to physically regenerate the area whilst also providing it with a sustainable future.
"The HCA funding has revitalised the Eastbank development, enabling the creation of over 100 jobs and given us the opportunity to show exactly how the private and public sector can work together to deliver outstanding city centre homes.
"We are building quality affordable properties at Mews and Cube that will be homes for first time buyers, downsizers, young professionals and families. It is about creating a community that will play its role in the resurgence of this part of the city and we are very pleased to be able to help deliver this part of the East Manchester vision."
Whittaker continued: "We will be holding an official sales launch later this summer, but as we are expecting a high level of interest in the development we are giving people the opportunity to register their details with us now. This will mean we can keep them informed of any news and developments at Eastbank and it will also provide people with the opportunity to be one of the first to own one of these great homes."
Deborah McLaughlin, North West director for the HCA, said: "We have a long term commitment to East Manchester so it is great to see so many new homes being developed in this key area of the city. This scheme will not only address the need for new housing in the area but also help create fantastic employment opportunities for the local community."