Edinburgh City Council has unveiled plans for 1,100 homes - the first time the council has built any housing in 20 years.
The council described the move as a 'major change' in the city’s housing strategy.
The plans form part of the city's response to the credit crunch and will include help for homebuyers.
Under the plans, homes would be built in Pennywell, North Sighthill and Gracemount and will help regenerate these areas.
Affordable housing would be subsidised by the surplus generated from the sale of private housing.
A report will be put to members on the 12 August to seek approval to undertake a detailed feasibility study for building and managing the new council homes.
It is expected this study will be complete along with plans for the sites by March 2009.
The council's housing convenor Cllr Paul Edie (Lib Dem), said, "I am really pleased to announce that we aim to build the first new council housing in Edinburgh for nearly 20 years.
"This is the first time in a generation that the council has considered building homes which marks a major shift in strategy and defining council housing in the 21st Century."