Sixty-six social housing homes in the Delacombe estate, with Leawarra Crescent at its spine, have been marked for redevelopment with 150 new units.

Victorian Housing Minister Richard Wynne, in visiting Delacombe on Monday morning, confirmed works would begin early next year.

See the area marked for redevelopment below

New units will be a mix of one, two and three-bedroom properties to help best cater to the region's social housing demand. All new properties will be built to a seven-star energy rating.

"We know just how important it is to ensure our community has safe, affordable and secure housing," Minister Wynne said.

"Today's $50 million committment by the government for the redevelopment of 60 old public housing properties here in Delacombe that are well past their used-by date."

Minister Wynne said residents living in existing social housing marked for redevelopment would be relocated during works and offered first option to return to the area.

"People have invested in this area and are housed in this area," Minister Wynne said. "We will house those people in alternative accommodation here and absolutely they have first right of return."

Minister Wynne said existing social housing residents were a mix of singles, couples and families.

Community consultation is set to begin, including a master plan for the project with existing tenants encouraged to have their say on design.

The project also aims to improve streets, public spaces and pedestrian and vehicle connectivity.

Delacombe adds to projects underway in metropolitan suburbs under the state government's $5.3 billion Big Housing Build announced in November.

The investment will include $1.25 billion redevelopment in regional Victoria will at least $80 million spent in Ballarat.

Wendouree MP Juliana Addison, who is part of the government's social housing consultative committee, said the Delacombe re-build was estimated to create 100 direct and 350 indirect jobs for the region.

Ms Addison said importantly, this was a win for the Delacombe community.

"We know Delacombe is a great place to live. It has fantastic schools, it has Delacombe Town Centre and we know people love living in Delacombe," Ms Addison said.

"[The project] is going to be most welcome to the community. We are very targeted in terms of the homes we are building. We know what the waiting list looks like, we know there is demand for one, two and three-bedroom properties."

The state government will also work closely with City of Ballarat on the project and City of Ballarat mayor Daniel Moloney welcome the $80 total investment in the city.

"Any community should be judged on how it looks after those less-fortunate," Cr Moloney said.

"We've got a lot of people here that can sometimes struggle to actually afford to provide a roof over their heads.

"We've got a really tight rental market right now as well and a population boom so all of these things continue to add to the ability to help make housing more affordable and I think that's a great thing".

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