Wandsworth Council is to build up to 85 new low cost homes for rent in Battersea.
The plans are due to be discussed by councillors in the new year, and would see the housing department designing and building the homes, which would be offered for rent.
As well as providing new homes the project would also generate new jobs and deliver additional employment opportunities.
The project follows the announcement earlier this year of a new £4m council scheme to build 130 new affordable homes in the borough. Across Wandsworth as a whole more than 1,600 affordable homes are expected to be built in the next four years.
If the scheme is approved the new homes would be constructed in Hope Street in Battersea, on the site of an ageing and underused sports facility.
The council’s housing spokesman Cllr Paul Ellis said: “London desperately needs more housing and of course there is a particularly need to build more affordable housing for people and families on low incomes.
“Utilising this site in Battersea to provide more low cost homes for rent would ensure that we can offer more support to families who have been made homeless through no fault of their own and others who are currently living in cramped or unsuitable accommodation.”