The government is freeing up land for a housing development on Te Atatu Peninsula in Auckland.
The 60-apartment development will include 20 percent social housing and 20 percent affordable housing below $650,000.
The land is currently owned by the New Zealand Transport Agency.
Building and Housing Minister Nick Smith said the Crown Land Programme meant the government could put in requirements for low-cost housing rather than just selling the property to the highest bidder.
"Our hope is to have a development agreement secured in early 2017, construction to get under way and the first families moving into this latest housing development in 2018."