A row of lock up garages in Wapping will be bulldozed to make way for 18 new council homes for families on the waiting list.
The town hall gave the green light to the development at Reardon Street and Wapping Lane, last week.
The new development will have 12 flats with one or two bedrooms and six family-sized flats with three bedrooms.
Councillor Rachel Blake, deputy mayor for planning, air quality and tackling poverty said: "At just eight square miles, space to build in Tower Hamlets is in short supply so we need to be inventive. We're making the most of land that we already own, including buildings no longer used as they once were, to deliver more council homes.
John Biggs, mayor of Tower Hamlets, added: "We've made tackling the housing crisis one of our highest priorities and I'm delighted that this development is now able to move forward."
The project will also include improvements to the existing open green space on the estate with enhancements to the garden area.
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