80 properties in Mar Court are to become the first in Scotland to benefit from the Scottish government’s National Retrofit Programme.
The measures will see insulated cladding fitted to exteriors of walls.
The programme offers a range of free or discounted heating and insulation measures to people living in older homes across Scotland.
The Keith properties are classified as 'hard to treat', meaning they qualify for the funding.
The term indicates they are unsuitable for cavity wall insulation and require external insulation cladding.
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The Council expects the Scottish government’s contribution will be aided through money from the energy company obligation element of the Green Deal.
Energy companies are required to fund measures to facilitate the homes of fuel-poor households and hard-to-treat properties.
Convener of Moray Council and local Member Cllr Stewart Cree welcomed the news.
"The design of these properties has prevented conventional insulation measures to be undertaken, such as cavity wall treatment," he said.
"That means it costs a lot more to bring these homes up to a reasonable insulation standard and prevent heat from being lost.
"I am delighted the council has been successful in attracting this money, as once completed this work should save a good amount on the resident’s energy bills, which can only be a good thing."
The Council is to begin a consultation with residents to discuss their participation in the project and the benefits to be gained in terms of saving money on fuel bills.
Work is expected to start on site in March 2013.
(IT)
