The housing association will work with Lovell to redevelop the land on Aspal Lane in Beck Row into 81 homes for shared ownership and 34 for affordable rent.
The GDV of the development is around £24m and will feature a range of homes, from one-bedroom flats and bungalows to four-bedroom family homes.
Philip Browne, new business and partnerships director at Clarion Housing Group, said it was pleased to be working with Lovell to deliver much-needed housing for Suffolk.
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“At Clarion, we aim to deliver 50,000 new homes nationwide over 10 years, two-thirds of which will be affordable.
“Thanks to our financial strength, we have been able to acquire this site and ensure that all of the homes being delivered at this scheme are affordable.”
Simon Medler, regional managing director at Lovell, said it was excited to be joining forces with Clarion Housing to deliver the scheme which would boost affordable housing in the area.
“The Beck Row development is set to extend the range of affordable options for the local community, both by helping people into home ownership and by creating new rented homes.”
The site comes with planning permission and the development will be completed by late 2020.