Story Homes has exchanged contracts to buy a 50-acre plot on the edge of Preston from the Homes & Communities Agency, and is developing a timetable to build 300 homes.
The housebuilder was granted planning permission for the development at Eastway by Preston City Council earlier this month.
The location already had outline planning permission which the HCA secured for a mixed-use development comprising up to 300 houses, employment land, a district centre and open space provision.
The mixed-use element of the scheme will come forward once the housing development is underway.
Eastway is one of 11 sites the HCA is bringing forward for housing within the Preston, South Ribble & Lancashire City Deal, and is the second development site which Story Homes and the HCA have agreed terms on in the last six months.
Story Homes will build a mix of family homes ranging in size from two to five bedrooms. This includes 45 affordable homes.
A payment in excess of £2m towards providing affordable housing elsewhere within Preston will also be made.
The housebuilder currently has another site under development within the Preston area, at Cottam which is owned by HCA. The development of 283 homes known as Waterside will feature a mix of mix of two, three, four and five bedroom properties.
Deborah McLaughlin, executive director, North West at the HCA, said: “Increasing the supply of new homes and creating attractive places to live is our number one priority. So it’s great to see HCA land being used at Eastway to achieve this aim for the City Deal. Combined with its acquisition of the nearby Cottam Hall site, Story Homes will be delivering in excess of 500 homes on HCA land in Preston in the coming years which is fantastic news. This will not only increase housing choice, and attract investment but also create jobs and support the local supply chain.”