Homes for rent are to be built on part of the former velodrome site in Leicester.
About 45 rental properties are to be built by Leicester Housing Association (LHA) on the site off Saffron Lane, in the first phase of a scheme which could create 100 new homes for the city.
They will be built on three acres of land sold to the association by Leicester City Council.
The £4.8 million project includes a 10-unit sheltered accommodation scheme and five properties designed for wheelchair users.
The development will be served by a new, signal-controlled junction off Saffron Lane.
City mayor Sir Peter Soulsby said: "We urgently need new homes – and we urgently need to support the local building industry. These proposals will help achieve both objectives, while helping to regenerate a site that has been vacant since the velodrome was demolished in 2008."
The project was given planning permission last month.
Developers expect to start work on site early next year, and hope to complete phase one within two years.
The remaining 3.5 acres of land on the site are expected to be sold for private housing in the second phase of the development.
The cycling arena, built in 1978, was demolished in 2009.
Previous plans by LHA for 120 homes were put on hold due to lack of money.
Plans by developer Lydian for 391 flats in blocks of up to six stories were thrown out by the council in 2006 after 600 residents claimed it was overbearing and would rob them of their privacy.
A scaled-down proposal for 160 flats and 90 houses was refused in 2011.
Michele Walker, of the Asra Housing Group, which includes LHA, said: "Not only will this development provide energy efficient quality homes but it will also help to provide and sustain much-needed local employment."
