HYDE Martlet has been given a £1.7m grant to complete work on the Heritage site.
Within the last few days, residents were told the work was set to start next week.
As revealed by the Observer, Hyde has entered into a contract with Drew Smith developers to construct 56 affordable homes on the site in Winden Avenue, Chichester.
Labelled an ‘eyesore’ by residents, the site has been derelict since 2008, when residents were moved out of their homes to make way for the multi-million pound redevelopment.
The Homes and Communities Agency also confirmed this week it had invested £1.7m in the project.
Hyde has now received 50 per cent of this, with it set to receive the other half of the sum if the project is completed by March, 2015.
Helen Burton, senior area manager at the HCA, said: “We can confirm that Hyde Housing Association has started work at the Heritage site in Chichester.
“It is great news as the scheme will provide much-needed affordable housing and is a key priority for the area.
“It is no secret that this project has seen delays so the fact that it is now underway is testament to the hard work and perseverance of all those involved in the development.”
According to Chichester District Council, as contracts were about to be signed in March, the previous developer walked away from the scheme – leaving Hyde in danger of losing funding from the HCA.
However, CDC helped Hyde renegotiate funding.
On Tuesday (October 8), cabinet will decide whether to allocate £1.17m to the site from Hyde Martlet’s designated reserve account.