The site on Fountain Lane in Oldbury, together with another on Leys Road in nearby Brierley Hill, will be redeveloped by Lovell Homes under the WMCA’s ‘brownfield first’ policy.
The West Midlands needs to build 215,000 new homes by 2031, but building these on brownfield sites involves higher clear-up costs.
The WMCA has therefore committed funding to encourage development on these sites, and protect the region’s green belt land.
£3.95m of this funding will now be used to pay for clean-up on the derelict Oldbury site, once home to an old foundry.
By 2025, it will become 234 new homes, including one and two-bedroom apartments as well as two, three and four-bedroomed houses.
Affordable housing will make up 49 per cent of the homes, which will all be ideally located near good transport links.
Stuart Penn, regional managing director for Lovell, said: “It’s thanks to the WMCA’s Single Commissioning Framework that we’re able to bring forward schemes like these at both Fountain Lane and Leys Road, and it’s a pleasure to be able to regenerate these brownfield sites into thriving new places to call home.”