The UK Government has approved a £113m regeneration project to improve the inner city neighbourhood of Brunswick in Manchester.
The Homes and Communities Agency, acting for the Department for Communities and Local Government, has given permission to Manchester City Council to choose a preferred contractor for the regeneration project.
The project will involve the refurbishment of more than 650 council homes, the construction of up to 500 new homes for rent or sale, as well as new road layouts and open spaces.
The project will incorporate a new retail area for shops and amenities, as well as a new office and sheltered accommodation facility.
The council will evaluate the final bids from both Fern Consortium and Solutions 4 Brunswick, before selecting the preferred bidder later in 2012.
Fern Consortium is made up of Harvest Housing Group and building company Gleeson.
Solutions 4 Brunswick includes Contour Housing, building firm Mears, Galliford Try and New City Vision.
Manchester City Council deputy leader Jim Battle said: "This announcement takes us a step closer to a new Brunswick, and although we still face a number of hurdles, this is a welcome announcement that gives some light at the end of the tunnel for residents who have waited years for these plans."
The 25-year regeneration project has been postponed for several years since funding for the project was agreed by the HCA under its housing private finance initiative (PFI) programme in August 2007.
Brunswick was one of 13 housing PFI projects in the procurement stage that the UK government said it would support following its spending review in November 2010.