The £645,100 grant has been given to Castlehill Housing Association (HA) for its 36-home project with Bancon Homes at Maidencraig, off the Lang Stracht.
The funding award is part of the council's aim towards developing more 'affordable' housing in the city, with the local authority announcing plans earlier this month to deliver 2,000 new council homes.
In 2017, the council also handed over the first properties at its development of 99 homes at Smithfield, with further phases nearing completion. A further 80 council homes are under construction at Manor Walk and the first properties were handed over to tenants in recent weeks.
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Cllr Sandra Macdonald said: "This is another welcome investment in affordable housing in Aberdeen, part of a bigger picture of positive change in housing provision in the city.
"As a Council we are actively adding to our own housing stock, with two major developments ongoing, but it is essential we work with housing associations and developers to address the challenges the city faces.
"The grant funding to Castlehill Housing Association is a good example of that approach and we are pleased the Maidencraig project, in conjunction with Bancon Homes, is moving forward. The delivery of 36 houses is welcome at a time when there are great strides being made."
Fiona Murray, Director of Development Services with Castlehill HA, said: "Castlehill welcomes the support of Aberdeen City Council towards achieving our objective of delivering much needed affordable housing in the city."
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