This investment will form the first phase of a planned three-phased development project on St Michael's Estate, which was recently green-lighted by the Irish Exchequer.
Both Environment Minister John Gormley and Minister for Housing Michael Finneran have welcomed the move.
Following the failure in 2008 of PPP proposals for the regeneration of the estate, Dublin City Council undertook a comprehensive re-examination of its options for the regeneration of the area.
Following this, the council proposed a three-phased regeneration of the area, which will deliver a high quality, mixed tenure, sustainable community comprising, social, affordable and private housing with supporting commercial and community facilities.
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Minister Gormley said that his department has now approved the council's proposal for the building of 32 social units in the estate as part of the first phase which will ultimately comprise 68 social homes and 69 affordable homes and also crèche and community facilities.
The second and third phases will involve the development of commercial and community uses for the site and also private residential development and a village square.
He said: "Development of this first phase will renew the residential viability of the estate and leave the project best placed to attract commercial interests and private investment and development into the area."
Minister Finneran said despite a cut in government spending, its commitment to social housing is undiminished.
"Specific priority is assigned to the regeneration of existing local authority estates, where particular emphasis is placed on addressing the issues of social, educational and economic disadvantage experienced in some of our most challenging areas."
(PR/JM)
