Planning permission has been granted for 20 new council homes as part of a new development in Nine Elms.
Wandsworth council approved the application this week for the scheme, which will create 20 low-cost rent homes for residents in the area.
The proposal is for a part four-, part five-storey brick building to provide a mix of one, two and three bedroom flats and maisonettes.
They will be owned and managed by the council.
The site falls within the Vauxhall Nine Elms Battersea Opportunity Area.
It is surrounded by the £2bn New Covent Garden Market and residential blocks on Hookham Court and Deeley Road.
The New Covent Garden Market redevelopment was given the go-ahead by Wandsworth in November last year, along with proposals to build a £500m Northern Line Extension to the area.
The area is also home to the Malaysian-backed Battersea Power Station redevelopment, which received planning approval for phase three from the council last year.
Planning applications committee chairman Cllr Sarah McDermott said: “This is a very good quality proposal and will provide another 20 low-cost rent homes in Nine Elms.
“The council will give top priority to people living in the local area to ensure the surrounding community is first to benefit.”
Cabinet member for housing Cllr Paul Ellis said: “We believe building new, smaller flats will be popular with local residents whose current homes are bigger than they need.
“This in turn will free up larger properties and provide homes for families living in overcrowded conditions.”