The funding boost will enable up to 1,500 homes to be built at Festival Gardens, a waterfront location in the city.
The development will include a mixture of owner-occupied houses and privately rented apartments.
Essential remediation works, that were held back due to lack of funding, will now begin ahead of the residential development works.
Sir Edward Lister, Chairman of Homes England, said: "We are determined to use all the resources available to us to make homes happen across England – so I'm thrilled our funding means work can move forward rapidly at this historic site, providing homes for hundreds of families.
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"And with Homes England and combined authority experts now working side by side, we expect to further accelerate the construction of new houses across the region."
This announcement comes as Homes England officially opened new offices in the same building as Liverpool City Region Combined Authority at Mann Island, Pier Head – a move designed to help the two organisations collaborate more effectively to get homes built.
Joe Anderson, Mayor of Liverpool, added: "We welcome this essential financial injection from Homes England. Festival Gardens is a much-loved waterfront location and people have very fond memories of spending time there. We are fully aware of the potential the Festival Gardens has and its transformation will be a game-changer for this city's economy in terms of new homes, construction jobs and growth.
"Thanks to this funding, the council can start essential remediation works on site and move forward with the vision of creating a significant number of new family homes in South Liverpool at an iconic destination.
"Alongside this, we are testing feasibility for a leisure element on site – Festival Gardens will not only deliver a much sought-after housing development, but also a first class visitor and cultural destination."
The first homes at Festival Gardens are expected to be available by 2022.
(CM/MH)
