The bulk of the money will be used to build 35 new homes in a family-friendly "Homezone" on the site of the former Marchburn School in Northfield, comprising 19 three-bedroom houses and 16 two-bedroom flats.
The Homezone concept ensures that residential streets are designed for people, not traffic, to improve the quality of life.
The £4.55 million Marchburn scheme will be the fourth development to be launched under the City Council's ambitious plans to build the first new general-needs council housing in the city for a generation.
Preparatory work has already started at Byron Park in Northfield, where 28 new homes will be built, and on Hayton Road in Tillydrone and Roriehall in Cults. Part of the latest award from the Scottish Government will be used to increase the number of units on Hayton Road from 28 to 30 and at Roriehall from 22 to 27.
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The schemes are part of a £26 million programme to create up to 200 new council homes across the city, funded largely from the council's housing budget and with an element of grant funding from the Scottish Government.
Housing and Environment convener Councillor Aileen Malone said: "I am delighted that the Scottish Government has recognised the Marchburn scheme as a top-quality development. The money will allow us to get started next November and hopefully complete by the end of 2011.
"Creating new affordable homes is a key policy of this Administration and this money moves us a major step forward to delivering on that promise and delivering for the people on our waiting lists."
Vice-convener Councillor Mark McDonald said: "This announcement marks another exciting milestone on the road to delivering affordable homes for people in Aberdeen and especially in our regeneration areas.
"We will be going ahead with the development in close consultation with the community and the views we gather from local groups and residents will be taken on board in the finalised scheme. There is a substantial demand for housing in this part of the city, with about one in three of all our applicants stating they would be happy to have a home in Northfield."
The Scottish Government believe the Marchburn submission, which was awarded £1.05million, fully met the required criteria and was "a well presented application, which provided evidence of well developed plans and of local need and provided a good fit with local objectives".
The government's total allocation for new council homes this year now stands at almost £50million and is estimated to support 3,000 jobs.
(GK/BMcc)
