Moray Council is planning to build new houses in Speyside for the first time in a generation.
The 23 homes are part of a proposed £3million development at the site of the former auction mart near Hill Street, Dufftown.
The local authority has now asked building firms to submit tenders.
A decision on the planning application is expected by the end of the month.
Speyside councillor and Dufftown resident, Fiona Murdoch, welcomed the development.
She said: “We have been waiting a long time to get new council housing in Dufftown so this is excellent news.
“The site is close to the town centre and the homes will cater for a number of different sized families and age groups, all of whom will be welcome additions to the Dufftown community.
“I look forward to seeing contractors on site.”
The move comes as figures released earlier this week showed that house prices in Moray have risen by 55% in the past decade.
An average home in the region now costs £143,027.
A council spokesman said: “These homes are part of the affordable housing programme, and will be designed to be highly energy efficient to keep fuel bills for the occupant as low as possible.
“There is a high demand in Speyside for affordable housing and this will go some way to meeting it.
“The development will be built in phases, hopefully starting soon after contracts are awarded.”
Applications for the new homes can be made using the ApplyforHomes website.
Those already on the waiting list for housing are advised to check their applications to ensure they have included Dufftown as an area where they wish to live.
The properties include eight bungalows which will be specially designed for older people.
Information should also be updated, particularly if a person has medical reasons for requiring specially adapted accommodation.