A total of 18 houses and 106 flats are being developed for Sanctuary Group at a former city prison site in Torry.
The Scottish Government has provided an £8m grant towards the scheme, which will be officially handed over to Sanctuary Scotland Housing Association in March 2018.
Speaking at a sod-cutting ceremony on Monday, Housing Minister Kevin Stewart said: "I am delighted that the Scottish Government's affordable housing supply programme was able to support this project with a grant of over £8 million. This will support the delivery of these affordable, high quality homes and will help address the demand for mid-market rented housing for key workers in the Aberdeen housing market area.
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"We have committed to deliver 50,000 more affordable homes over the next five years, backed up with investment of more than £3 billion. Projects such as this one today mark another step on the road to delivering that pledge."
Keith Taylor, regional managing director of Robertson Eastern, said: "Across the life of the project there are a total of 74 training and employment opportunities. These include local employment, work placements, apprenticeships and education opportunities, including formal certificates and N/SVQs."
Peter Martin, Sanctuary Group's director of development, added: "We at Sanctuary are pleased to work with the Scottish Government on this pilot project. We will deliver much-needed affordable accommodation for those employed in Aberdeen's public services.
"Our new homes will become an integral part of Torry and provide wider benefits to the community."
(LM/CD)
