The site in Pappert, Bonhill, was one of 15 chosen to benefit as part of stage two of the Vacant and Derelict Land Investment Programme, announced earlier this week.
The Council will be awarded £500,000 in 2023/24, with additional funding in future years to deliver a proposed 27 high quality homes.
The planned development will be subject to an approved planning application.
Council Leader, Councillor Martin Rooney, said: "I am delighted that we have been successful in gaining funding to help with transforming this site. The proposed pilot project aims to provide much-needed high quality, affordable homes in our area, making use of a derelict patch of land."
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A total of seven Passivhaus homes are proposed for the site as part of the pilot, with a further twenty net-zero homes utilising zero emission heating and other energy efficient technology.
Innovative Passivhaus homes generally need 90% less energy for heating and hot water than standard buildings and so have very low running costs.
Through use of pioneering technology at building stage including enhanced insulation, airtightness and solar power, the homes are able to retain heat from activities like cooking, using computers or showering.
These activities are then used to heat the home instead of a traditional central heating system.
Deputy Leader, Councillor Michelle McGinty, said: "During a cost of living crisis when everyone is worrying about their finances, reducing the running costs for households is more important than ever. I welcome this funding which will help us put a vacant piece of land to good use for our communities."
Community Wealth Minister Tom Arthur said: "By targeting long-standing vacant and derelict land we can ensure that investment reaches the areas that need it most.
"The Scottish Government's Vacant and Derelict Land Investment Programme helps attract investment to locations which have lain dormant for years. It also supports low carbon developments, such as this housing development in Pappert, that will accelerate our ambition of helping Scotland reach net zero by 2045 and grow an economy that is greener, fairer and more prosperous.
"I congratulate West Dunbartonshire Council on this innovative project."
