Tameside Council has approved a planning application submitted jointly by Peak Valley Housing Association and Rowlinson Construction for new shops and apartments on Honiton Road, Hattersley.
The Homes & Communities Agency has put £2.5m into the £4.7m schemes which will see the development of 33 two bedroom apartments on the site of the current retail units. New retail units will be developed adjacent to the new properties.
Rowlinson Construction owns the site and Peak Valley will rent the apartments to offer to the over 55s market.
Phil Corris, managing director of Peak Valley Housing Association, said: "This is great news for people living near the shops who will benefit from new facilities and an improved environment.
"We will also be able to provide much need new housing in the area."
John McCall architects designed the apartments. Work on the new retail units will start shortly with opening due in spring 2011. Once the new retail units are built, the old ones can be demolished and work should start on the new residential element of the scheme by March 2011.