The Department of Housing, Planning and Local Government has agreed to fund 30% of social housing at O'Devaney Gardens in Dublin.
This means up to 300 social and affordable homes will be delivered at the site.
Sinn Féin Councillor Janice Boylan said: "This is in line with Dublin City Council's land initiative. After many false starts it seems that the long suffering tenants of the blocks and surrounding area are finally going to see homes built on the land.
"A further 20% will be affordable and cost rental while 50% will be private.
"This is a major step forward and shows that we can deliver a comprehensive building programme on council land. We can move forward now we have the commitment we needed, the funding we needed. Finally we will have a thriving community again made up of good quality mixed tenure homes."
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