The Homes & Communities Agency and CALA Homes (Midlands) have exchanged contracts to progress redevelopment of the Royal Shrewsbury Hospital South site.
The deal will see construction of 112 homes on the 3.19ha site if CALA can obtain planning permission.
"We continue to sell strongly on our developments across the Midlands and we feel that the time is now right to start acquiring land again for future developments," said CALA (Midlands) managing director Darren Humphreys.
The company said the deal is part of its strategy to replenish its land bank.
"In addition to this major land purchase in Shrewsbury, we have optioned a large area of land in Moreton-in-Marsh and we continue to explore opportunities to acquire further land," said director Matt Gallagher.
