According to the government, £141 million is to be spent on creating new council houses in Britain, which will form part of a wider plan to roll out more affordable housing.
Housing minister John Healey described this as the biggest council house building programme to be introduced in Britain for almost 20 years.
The scheme got underway in Tyneside this week at a development where 15 homes are to be created.
Mr Healey commented: "Tyneside shows how the power of government investment is tackling the shortage of affordable housing and also creating new jobs and supporting the construction industry when it needs it most."
Councillor Bill Brady of South Tyneside Council added that the region is very proud to be the first place in the country to benefit from this new initiative.
This comes as the government presses ahead with its Kickstart scheme, in which developers can apply for funding to get stalled building projects back up and running.