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With this latest funding, since April 2009 local authorities across Scotland will have received £75 million to help build more council houses.
To date, nearly £50 million has been allocated to councils to start work on almost 2,300 new houses.
Local authorities are asked to submit applications for funding by the end of April.
Minister for Housing and Communities Alex Neil said: "Local authorities across Scotland have enthusiastically embraced the opportunity to apply for funding to help reverse decades of decline in council house building.
"They are working with us to deliver more affordable homes and in doing so, encouraging development that chimes with the key themes of our Economic Recovery Plan.
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"We recently proposed radical legislative change that will end Right to Buy on new build social housing, and save up to 18,000 homes in the social rented sector over the next ten years.
"Today's announcement adds more weight to those positive measures, helping to boost supply and acting as an incentive to build a new generation of council houses in Scotland."
Councillor Harry McGuigan Spokesperson for Community Wellbeing and Safety Executive Group: "COSLA fully welcomes the announcement of the third round of funding for local authority council house building.
"The latest kick start money combined with local authorities own financial investment puts council's in a position to deliver even more much needed new affordable homes.
"Councils across the country have shown a willingness to build new homes by embarking on one of the most significant programme of council house building in recent times.
"The government's pot for new homes is over-filling with demand, and there is a compelling case for freeing up more resources, which will allow councils to build more affordable homes and continue to contribute towards Scotland's economic recovery."
Agreement has been reached with COSLA on the approach to encourage council house building, including the criteria that will be used to ensure that the £25 million is focused on councils with housing need and the resources to take forward projects in the near future.
(GK)
