The NI Social Development Minister Margaret Ritchie cut the first sod to begin work on eight new family homes in the St Gall's area.
The development by Oaklee Housing Association - costing just over £1million - will incorporate the latest in energy saving, design and security features.
Builders Moss Construction aim to complete the project in January 2010.
It is the fourth of five phases in the £13m redevelopment of the St Gall's area where the new three and five bedroom houses are to be constructed at Conway Street on land formerly occupied by the Ashmore Street hostel.
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Previous phases have seen 74 houses and apartments built in the immediate area over the past four years.
Margaret Ritchie said: "Providing social houses in Northern Ireland is the number one priority in the New Housing Agenda.
"That is why I have planned 1,750 new homes in this financial year. When this regeneration of St Gall's iscomplete, we will see almost 100 new homes built in this area of high housing need.
"Through Oaklee Housing Association, these latest houses will continue the provision of high quality, energy efficient homes, built to even more exacting standards than before.
"Good housing is the cornerstone of strong, stable and sustainable neighbourhoods and I am pleased that my Department, working alongside the NI Housing Executive, elected representatives and the local community, has been able to contribute in such a positive way.
"I have no doubt that this housing will act as a catalyst to further enhance and stimulate the physical and environmental regeneration of the area," she concluded.
Oaklee Housing Association is one of 32 housing associations registered with the Department for Social Development.
It manages some 4,000 homes throughout Northern Ireland in sheltered accommodation, family housing and specialist care schemes.
(BMcC/JM)
