The Homes & Communities Agency has increased its investment in the former RAF Locking site near Weston-super-Mare by £2.5m to £12.2m since 2002, to provide 100 new homes on the site.
The investment in Locking Parklands follows the £390m in the Budget to fill part of the Agency's £780m black hole.
The Agency acquired the site from the South West Regional Development Agency in May and now St Modwen will take overall responsibility for managing and maintaining the site where 1,800 homes, 80,000m² of offices and a business centre are planned.
"It's great news that work to transform Locking Parklands can start, with investment approved for the project," said HCA director Colin Molton.
"This project is about so much more than delivering new homes. It will provide many hundreds of jobs and opportunities for business, which is good news for the area. I very much look forward to work starting on site, so that local people can begin to see the vision for Locking Parklands being turned into reality."
The RAF base closed in 2000 and regeneration planning began in 2002 when it was acquired by the HCA and SWRDA, with St Modwen chosen as preferred developer in 2008.
"We are pleased to be working with the HCA on Locking Parklands and it is very positive news that the scheme will go ahead with this funding," said St Modwen regional director for the South West Rupert Joseland. "We have worked closely with North Somerset Council and the community to create a first phase that will advance the quality of housing in Weston."
The Council has given planning approval for several of the developments already and other plans will be submitted later this year.
"I am very pleased to see opportunities for new employment going ahead on this site and look forward to discussing longer-term redevelopment in line with our revised Parklands Village strategy," said executive member for strategic planning Elfan Ap Rees.
