Construction on 81 new affordable homes at the former John Mansfield School site in Western Avenue, Dogsthorpe, begins in the next week.
Cross Keys Homes, working with national homebuilders Keepmoat Homes, is to provide the properties for rent and shared ownership when they are ready early in 2019.
The housing association is also currently working on new homes in Westwood, Hampton and Whittlesey. Last year it secured an £80 million loan from Lloyds Bank Commercial Banking and Handelsbanken to help build 2,000 new homes by 2021.
Chief executive Claire Higgins said: “Building homes in Peterborough is a fundamental part of our plans as we know there is a real need for affordable options in many communities across the city.”
She added: “We are actively seeking good opportunities to build new homes on other sites in Peterborough and the surrounding area. We positively welcome approaches from developers and housebuilders.”
The development at the John Mansfield site will total more than 200 homes, with 81 provided for Cross Keys.