Liverpool Mutual Homes has appointed contractor Willmott Dixon to the £8m refurbishment of Marwood Tower designed by John McCall Architects.
The tower on land between Great Homer Street and Kirkdale Road will become 81 apartments for over-55s.
The proposed scheme forms part of the new Liverpool Housing Partnership forged between Liverpool City Council, Liverpool Mutual Homes, Redrow Homes and Willmott Dixon to deliver 1,500 new homes and bring a further 1,000 back into use across the city.
The scheme will see 57 flats completely refurbished and 24 new apartments built to provide a mixture of one and two-bed properties.
A new arc around the base of the tower will be built that includes a courtyard garden and a community consultation exercise is taking place to decide the designs and features. The old and new buildings will be linked by covered walkways that open in the centre of the courtyard.
Cllr Ann O'Byrne, cabinet member for housing at Liverpool City Council, said: "This is an exciting scheme which will completely transform the tower block and create much-needed good quality accommodation.
"This is another example of where we are working with partners and being creative in finding new ways of re-using existing buildings and sites to meet our commitment to build 5,000 new homes and bring another 1,000 back into use."
Stuart Belfield, operations director at Willmott Dixon, said: "We are particularly looking forward to making a difference in the community, creating local jobs throughout the works and delivering high quality housing that residents will be proud to call home.
"The scheme is going to create a lasting legacy for Liverpool because Marwood Tower is such a prominent landmark on a major route in and out of the city that is seen by millions of people every year."