The 2016-17 Draft Budget proposes to build between 8,000 and 9,000 new homes across the country.
The announcement is part of the government's pledge to deliver 50,000 new homes over the next five years.
The 2016/17 investment is expected to create between 13,000 and 15,000 construction jobs, generating £1.9 billion of economic activity.
Housing Minister Margaret Burgess said: "This £690 million housing investment is the first part of our bold, credible and affordable commitment to delivering 50,000 affordable homes by 2021. Overall we will invest more than £3 billion in housing over the next five years as a crucial part of our drive to tackle poverty, and helping to give our children the best start in life.
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"Our £90 million increase in affordable housing supply compared to 2015-16 is just one part of our broader approach to making sure everyone has access to good quality, energy efficient homes, where they can feel secure and warm.
"We have a strong record on housing. We had a target of delivering 30,000 affordable homes in this Parliament and have exceeded that. We are also approaching 4,000 new affordable homes approvals through a range of innovative financing mechanisms.
"We will continue to work collaboratively with a wide range of partners across all sectors to promote the construction of new homes, support jobs in the construction industry and encourage inclusive growth in the wider economy."
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