A total of 80 homes will be built at Manor Walk in the Middlefield area. The scheme is part of the council's new housing programme and further work is underway on 99 council homes at Smithfield to be delivered in 2017.
The housing programme is being carried out in association with Places for People and delivered by Shaping Aberdeen Housing LLP.
The properties at Manor Walk will be joined the council's Combined Heat and Power (CHP) Scheme which recycles energy from waste to provide low cost energy options for tenants.
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A council spokesperson said: "The Manor Walk development represents significant investment committed by Aberdeen City Council to build new, state-of-the-art council homes in the city.
"Alongside the Smithfield development the project will advance the council’s housing portfolio and offer contemporary homes, which are of a high quality, sustainable and energy efficient design, for residents who are struggling to meet private rents.
"Both of these developments sit within the local authorities’ £35million Shaping Middlefield plan - an investment programme set to completely transform and regenerate the area for existing communities by creating new facilities as well as improving the infrastructure and creating open spaces.
"Projects include the £2.6million refurbishment and extension Lord Provost Henry E Rae Community Centre, a new purpose-built games area, landscaped green spaces and a new play park – while is similar plan is being developed for the Tillydrone area."
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