A total of six two-storey homes will be built on a site east of Hayfield in Oban.
The approval brings the number of 'affordable' units on the site to 18, over the 25% required via the council's local development plan.
Cllr David Kinniburgh said: "This planning approval, in keeping with the council's local development plan and national planning policy, is great news for people in and around Oban who are looking for good-quality, affordable housing.
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"It's also good news for people who work in construction – new developments support local joiners, plumbers, builders, electricians and so on."
Cllr Robin Currie added: "This is a very exciting time for housing in Argyll and Bute. With 554 new affordable homes having already been created, and plans for up to another 650, this will go a long way to addressing the housing shortage.
"The creation of additional housing is also good for employment, particularly jobs in the construction sector; it will create a more effective operation of the local housing system; contribute to improving general health and wellbeing; and stimulate community regeneration and sustainability."
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