The Homes & Communities Agency has invited the Hab Oakus joint venture between Hab and Green Square to be the delivery partner for housing on the former Cashes Green Hospital site in Stroud.
Hab Oakus will work with the Community Land Trust and Gloucestershire Land for People in developing a planning application for comprehensive redevelopment of the site including 78 homes, allotments and a community building.
It will be the first housing-focused Community Land Trust proposal on HCA-owned land.
"This is an important project, and I am delighted we have been able to help find a way to support the Community Land Trust realise the ambitions of the local community to deliver much needed housing on this derelict site," said HCA head of area David Warburton.
A planning application is to be submitted later this year for the homes, 39 of which will be affordable.
"Innovative sustainable developments really are the way forward for housing," said Stroud District Council cabinet member for housing Debbie Young.
"We're looking forward to seeing this exciting project come to fruition."
The homes will meet Code for Sustainable Homes Level 4.
