Work has started on a project to provide 22 affordable flats and houses on former NHS land in the New Forest.
They will be built next to the recently opened Hythe and Dibden War Memorial Hospital, a £10m complex that has replaced what was described as a "functionally unacceptable" facility.
The properties will replace a 1960s medical centre that was next door to the old hospital and closed last year.
Cllr Steve Davies, the district council's portfolio holder for housing and homelessness, said: "I'm delighted to see progress being made on the ground and to have secured central government funding to help clear the site."
The homes are being built on land that was declared surplus by the NHS and sold to the council for an undisclosed sum.
Health chiefs had described the medical centre that stood on the site as "tired and ageing".
The council's planning application said: "Whilst this accommodation is currently occupied by the NHS, it will become vacant and redundant once the remaining functions have moved into the new hospital."
READ MORE: Land beside new Hythe hospital described as "ideal" for affordable housing
The scheme comprises nine one-bedroom flats, six two-bedroom flats, two two-bedroom houses, three three-bedroom houses and two four-bedroom houses.
The application said: "The design approach has been carefully considered to ensure it responds positively to the surrounding context, including the new hospital.
"The proposal will not result in the loss of a health facility in this location.
"It will instead see the relocation of existing services to the new hospital whilst allowing for the effective re-use of soon-to-be vacant buildings on the application site."
A council report said the loss of the NHS buildings was acceptable because the new hospital would provide an improved and more efficient health service.
It added: "The plans demonstrate that 22 dwellings could be provided on the site and achieve a good quality development without detriment to the character and appearance of the area."
READ MORE: Work on new Hythe and Dibden War Memorial Hospital due to start soon
Planning permission for the new homes was granted last year.
Cllr Ann Bellows cited the demand for social housing and said she was happy to support the scheme. Cllr Malcolm Wade added: "It's an ideal site for this sort of development."
The properties will be built on land between Beaulieu Road and Fawley Road.
The adjoining hospital is the third to be built in Hythe. Its predecessor, which replaced the Hythe and District Hospital in Atheling Road, was opened almost exactly a century ago.
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