Mulbury Homes is to build 50 apartments in Darwen, Lancashire, targeted at the over 60s for Twin Valley Homes.
The site was partially developed as luxury apartments but stalled in 2006 when the previous developer went into administration. The former Darwen Health Centre site in Union Street has now been acquired by Twin Valley.
Mulbury, based in Lymm, Cheshire, will use the existing steel structure from the stalled development, but the partially built brickwork will be pulled down and rebuilt. Construction of the new flats is expected to begin in the coming weeks and last 12 months. The architects on the scheme are LMP Architects, based in Chorley.
Greg Mulligan, director of Mulbury Homes, said: "This development will provide efficient and modern homes giving residents the independence of having their own front door, but also allowing them to feel part of a community thanks to a number of communal areas for socialising and leisure activities.
"We are now working closely with Twin Valley Homes to ensure the homes fully meet residents' needs. As well as providing much needed housing, this development will revitalise the area, finally completing what has been a building site for the last few years."
Ian Bell, Twin Valley Homes' head of housing, added: "This is a very exciting opportunity to regenerate this site and provide safe and secure retirement living properties in Darwen. We have some excellent retirement living accommodation in the borough and this is a fantastic addition to our portfolio."
The health centre that previously occupied the site closed in 2005 when a new £7.3m replacement in Police Street opened.