Work has begun at Vimto Gardens, part of the Salford Central regeneration scheme.
The Chapel Street development is being delivered by English Cities Fund – a joint venture between Muse Developments, Legal & General Property and The Homes & Communities Agency – in conjunction with Salford City Council.
ECf chairman Sir Michael Lyons joined Cllr David Lancaster, deputy city mayor of Salford, and Matt Crompton, joint managing director of Muse, to mark the introductory phase of building work on the 2.3m sq ft regeneration scheme.
The Vimto Gardens site, which lies between Chapel Street and St Philip's School, will become home to a six storey luxury residential building.
It has planning permission to include 83 apartments and 14 town houses, which feature an internal private courtyard on the first floor, as well as retail and commercial units on the ground floor.
The development takes its name from soft drink brand Vimto, as the plot is based just 400 metres from the drink's original factory site on Chapel Street. The new build apartments and town houses will celebrate the brand's personality and its zest for life.
By late 2014, to early 2015 the first homes and apartments will be ready to move in to.
Sir Michael Lyons, who dug the first sod at Vimto Gardens, said: "ECf is pleased to be starting this exciting new project as part of its ambitious plans for the reshaping of Salford's city centre.
"The wider Salford Central scheme is a great example of the work ECf was set up to do: creating new homes, shops, workplaces and high quality public realm by bringing together public and private skills and working creatively with local partners on long term basis."
English Cities Fund was granted consent to build the development in December.
The first phase of Salford Central has secured agreed investment from HCA and Greater Manchester Combined Authority Investment Fund.
The HCA has invested £3.4m into the scheme, through its Get Britain Building Programme.
The GMCA has also invested £3.4m from its Growing Places fund.