Almost 100 houses will be built on green fields in east Belfast after a £9m cash injection from the Republic's bad bank, Nama.
The bank, set up to cleanse the Irish banking system of toxic property loans, said it may give more funding to the Millmount development in Dundonald if the first phase of 95 houses is deemed a success.
Northern Ireland properties make up 4% of Nama's £25.8bn portfolio.
Four and five-bedroomed houses will be built by Lagan Homes, appointed by administrator Baker Tilly Ryan Glennon after a tendering process which attracted 20 interested parties. Nama said the build was expected to generate around 100 jobs over 18 months – and later phases may include another 415 properties.
Chairman Frank Daly said: "We are committed to supporting projects that can deliver a commercial return and I hope that there will be more projects like this in Northern Ireland."
He said the agency had to choose between selling it in an undeveloped state or funding its development to create "a more valuable asset". Nama also said it is looking at introducing its 'deferred equity' mortgage scheme in Northern Ireland, and said it may be available for house purchases at Millmount, a site which had been mothballed since 2009.
The scheme aims to insulate house buyers against falls in house values during the first five years after purchase. Funding has been provided to the administrator, which in turn has entered into an agreement with Lagan Homes.
Finance Minister Sammy Wilson welcomed the commitment by Nama: "I am pleased, first of all because Dundonald is somewhere where there is clearly demand for houses. Where there is a market for houses, and where there's a land bank available, I have been stressing to Nama not to hold on to the land because it holds back development and prevents jobs."
The 96-acre site was formerly owned by Taggart Holdings, which collapsed in 2008. It funded the purchase with loans from Anglo Irish Bank.
Lagan Homes was set to build 150 homes on the site in 2009 until Nama became involved. However, Nama would not say anything about how its relationship with Lagan Homes – which said the work is expected to begin immediately – had changed since.
John Armstrong of the Construction Employers Federation said: "Nama has recognised that developing this site will deliver a good return on investment."