The former premises of cricket equipment specialist Gunn & Moore on Haslam Street have been demolished and the land around them reclaimed to provide for the building of 15 three-storey houses and 26 apartments.
Brydon Developments has now completed the site preparation, so Redrow Homes (Midlands) can now begin work. An inlet from the canal and a new towpath will also be constructed.
The agency's acting head of central team, Richard Harrington, said: 'Park Wharf will play a key role in injecting fresh vitality into this part of the city. The central location means that residents who work in the city centre will be able to get to work on foot.
The£1m scheme, using money that's originated from national regeneration agency, English Partnerships, also embraces refurbishment of larger premises - double the size - for Gunn & Moore at Trent Lane, ensuring that one of the city's best known firms remains local.
Brydon Developments partner John Brydon said: 'This is an exciting project involving the regeneration of challenging sites, in line with the Government's policy of re-developing brownfield sites wherever possible.'
Redrow Homes (Midlands) managing director David Campbell-Kelly said: 'This will be the latest in a new breed of projects nationwide by Redrow under the umbrella branding 'In the City'. Such schemes are helping to breathe new life into city centres, regenerating often-redundant sites and providing sustainable development close to employment, shops, entertainment and public transport.
'We are very excited about the Park Wharf venture and look forward to providing contemporary homes for today's city dwellers.'