Andrew Shepherd Construction will carry out the £5.6 million project at the old Chapelpark School site in Forfar.
The 16-month scheme involves creating 29 new homes from the empty B-listed buildings, including 18 one-bedroom flats, six two-bedroom flats, one three-bedroomed flat and four five-bedroomed townhouses.
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Each property will be completed to a silver standard of sustainability, measuring energy efficiency and carbon output.
The council is financing the project, along with a £1.6m grant subsidy provided by the Scottish Government.
Cllr Donald Morrison said: "This significant housing development will help meet a pressing need for affordable housing in Forfar and Angus.
"Everybody has a right to good quality housing and we're delighted that construction is now underway on this high-quality development."
The project is expected to be completed in summer 2017.
(LM/MH)
