The £3.9million plans will see a mix of 27 homes built, including 1-5 bedroom properties ranging from cottage flats through to townhouses facing onto Main Road.
The development will be paid for by the Scottish Government's Housing Subsidy programme, South Ayrshire Council, and with income generated from Council Tax levied on second homes.
To allow the project to proceed a block of four Council flats on James Brown Avenue will be demolished. The three affected tenants will be rehoused on a temporary basis, and given the opportunity to return to the new development once it has been completed.
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Councillor Philip Saxton, South Ayrshire Council's Portfolio Holder for Housing and Customer Services said: "We're committed to building 600 new homes in the next five years, and this exciting new development in Ayr marks the start of that process.
"By making more energy efficient homes available people are able to run their homes more cheaply, while we're also making smart use of a site that has been vacant for several years.
"I'd like to thank the affected tenants on James Brown Avenue for their patience during the planning stage, and I would stress that we'll continue to work with them in the months ahead.
"With more than 100 properties built in Lochside last year, we're working hard to meet local needs and I look forward to seeing construction get underway for a development that will remove a prominent gap site on one of the town's busiest roads."
(CD)
