Lancashire house builder Rowland Homes will start work before the end of the year on 82 units on a former factory site in Leyland.
South Ribble Council has granted consent for the development on the old Prestolite site in Cleveland Road.
Prestolite made starter motors for the town's automotive industry but the factory was demolished in 2008 following closure and has been derelict since.
Paul Rowley, managing director of Rowland Homes, said: "The former factory site had become an eyesore and a blot on the landscape of Leyland, which residents have had to put up with for too long. Our £13m scheme will regenerate the 5.5-acre site to offer a choice of houses and apartments. It's a welcome boost to the area as we will be providing new homes close to the town centre and there will be employment opportunities for local people."
The first properties will be available to buy in the spring.