The partnership aims to build low-cost homes for injured servicemen and women.
At a cabinet meeting earlier this week, Midlothian Councillors agreed to support the move, which could see a number of homes constructed on the sit of the old Pentland House, opposite Tesco in Penicuik.
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The charity wants to build around eight homes in the Penicuik area due to its strong military links.
If the project is given the green light, it is understood the council would gift the land, or offer it to the charity on a peppercorn rent. The local authority would also build the homes to Houses for Heroes specification, and then sell them to the charity at a discounted price.
Officers will now work with the charity to establish more details about the suitability of the site and the costs involved.
(JP/CD)
