Corby Borough Council and construction firm F1 Modular held a start-on-site ceremony at Wilby Close to mark the beginning of work to produce four new flats.
The block of disused garages is at the head of the street in the Lodge Park area of the town.
This latest regeneration project from the council will see the garages replaced with a block of four modern, one-bedroom council flats.
F1 Modular, the company undertaking the scheme with the council, specialises in the modular method of building, which means all the units, including kitchens and bathrooms, are built in a factory before being winched into place on-site, where the brickwork and landscaping is finished off.
The construction method means less labour work will be visible to nearby residents, the council said.
The project is due to be completed by this autumn and is being funded by Right-to-Buy receipts received by the council. The Government's Right-to-Buy scheme gives most council tenants the option of buying their council home from a local authority at a discount.
The four new properties will add to the council’s housing portfolio and will bring the total number of properties built by the council to 246 since 2010.
Once complete, all four of the new flats will be available for rent and added to the Keyways social housing allocation scheme.
Councillor Bob Eyles, the council’s lead member for housing, said: "We are extremely happy to be working with F1 Modular on yet another project that will bring more much-needed modern and affordable homes for the people of Corby.”
Antony Walters, the chairman of F1 Modular, added: "F1 Modular is delighted to be working with Corby Borough Council to provide these high-quality affordable homes for its local residents.
"The units are currently being manufactured in the factory -- I saw them there a few days ago -- and will shortly be transported to the site.
"Modular construction enables the energy efficiency of the houses to be increased as well as minimising the disruption on-site."