The project is the second phase of the council’s 21st century homes programme, which aims to build up to 1,400 homes for sale and rent across the Scottish capital over the next eight years.
At least half of the homes in Pennywell will be affordable with the remainder for sale and rent in the private sector.
Construction on the site is due to start in 2013 with the new homes being ready to be lived in by 2014.
Mark Turley, director of services for communities, said: “As part of the procurement process, the successful developer is also being asked to provide training opportunities and apprenticeships for young people during the course of the construction project.
“This will be a hugely important contribution to the regeneration of this area.”
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