Almost 5,700 public sector houses were started in 2007-08, more than any year since the early 1990s.
Local authorities across Scotland started 432 council houses in 2007-08, compared to a total of six completed in the previous four years.
And the Scottish Government is to invest £640m as part of its Affordable Housing Investment Programme in 2009-10.
Deputy First Minister Nicola Sturgeon said: "Investing in housing is vital because it creates the new homes that are needed across the country.
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"It is doubly important right now because public sector investment in housing helps support and create jobs in the building industry. That's essential during the current economic downturn."
Ms Sturgeon said after years of neglect and broken promises from the previous administration, the Scottish Government is investing significantly in public housing again. In the first year in office more public sector houses were started than at any time since 1997.
"The previous administration abandoned council housing with only six council houses built during the last four years in office. This Government has kick-started a new generation of council housing and I want to see more councils getting involved in building homes for rent.
"In the coming year we are committed to spending a record level of resources on affordable housing. Over £600m will allow us to build more homes and create jobs." she said.
Ms Sturgeon said the housing association movement will play a 'pivotal role' in delivering high quality houses.
"The Scottish Government is determined to support housing associations in delivering this goal," she concluded.
