The Cambridgeshire and Peterborough Combined Authority’s Housing and Communities Committee gave the go ahead for the funding on Monday as part if its £100 million affordable housing programme to build 2,000 homes before March 2022.
A further £2 million was also approved to deliver 50 new homes at Fairbarn Way in Chatteris.
The final sign off for both schemes is expected at the mayoral body’s board meeting at the end of the month.
The number of affordable housing grants awarded is now 55, with 37 projects totalling 733 units having already started and 18 projects subject to approval from the Ministry of Housing, Communities and Local Government.
Dr Nik Johnson, Mayor of Cambridgeshire and Peterborough said: “The Northminster development takes a green space and environmentally focused approach to high-end inner-city development, looking to provide much needed housing for young professionals and key workers.
“I am mindful of the need to relocate the much-loved Peterborough market and have offered my support to Peterborough City Council to help them do so.”
As previously outlined by the Peterborough Telegraph, regeneration of the city centre site will deliver one, two and three bedroom “high end” properties with commercial space on the ground floor to be used for leisure or hospitality.
Peterborough City Market will be demolished, but city council leaders have promised to find traders a new home.
The scheme is being delivered by the Peterborough Investment Partnership.
Should planning permission be granted, works are expected to begin at Northminster early next year.