Homes are to be built on the site of a former car park near Norwood Junction station.
Croydon Council has bought the land at 24 Station Road, next to the Co-Op store, and will be submitting a planning application within the next few months.
With the number of homes yet to be finalised, this will include plans to build apartments as part of the council’s New Build programme.
The application will be for a mixed use scheme, which includes a commercial space on the ground floor.
Hoardings have now gone up around the site to prevent fly-tipping.
Councillor Alison Butler, cabinet member for homes and regeneration, said: “Croydon like many other London boroughs is experiencing a severe shortage of housing.
“Subject to planning permission, this site will enable us to provide much needed council housing for families in need.
“Building new homes is a key part of our plans to regenerate Croydon, with some 9,500 forecast for the next five years.
“South Norwood is one of our major district centres, and this development will help towards its much needed revitalisation.”