Sanctuary Group has been named as the developer of the former swimming pool site at Sansome Walk in Worcester.
The City Council, which currently owns the land, announced the decision to sell the site following a fresh open competitive procurement process.
Sanctuary previously looked set to take over the site under proposals for a development of 76 new homes which went through consultation with local residents.
Under the new plans, the Worcester-based housing provider is looking to build 40 affordable housing units on the site, subject to planning.
David Soothill, Sanctuary's Director of Development for England, said: "We are delighted to have been selected as the development partner for this important site in the heart of Worcester.
"As a major investor and employer in the city, we have always maintained a keen interest in the site and believe this new proposed development will be a great addition of much needed high-quality affordable housing for the community."
"There is a clear need for more affordable properties for local people to rent in Worcester.We are delighted that Sanctuary, with its strong track record for delivering high quality social housing developments, will create a new and positive future for the site," said Cllr Marc Bayliss, Leader of Worcester City Council.
"We will work closely with local residents throughout the demolition and construction phases, ensuring that they are kept well informed throughout the process."
Sanctuary intends to submit a planning application by early summer, with demolition of the existing building due for completion in the Autumn.
Last year the City Council appointed DSM Demolition Limited to demolish the former Swimming Pool and remediate the site for development.The City Council will meet the cost of the work, which is expected to be in the region of £2.636 million in total.The cost will be supported by a grant from central Government's Land Release Fund.
