The first stage of the £7m project to revamp the Bellamy estate will see a new play area created in the centre of the estate as part of a new 'village green' area.
That is expected to be complete by June when work is scheduled to start on a new learn to cycle track near the play area.
The last stage of the Bellamy Road Community Heart Housing Development will see 22 high quality, eco-friendly and affordable family council homes built around the green.
The scheme includes demolishing existing shops and five flats in Egmanton Road and building a new single storey parade of retail outlets with a convenience store, cafe and takeaway.
There will also be a new traffic-calmed through road connecting Thorpe Road and Egmanton Road which will allow for improved bus connections through this part of the estate.
All the new homes, to be offered at affordable rents, will be owned and managed by Mansfield District Council and are a key part of its priority neighbourhoods focus and strategic priorities for Growth, Wellbeing, Aspiration and Place.
The council's in-house architects are designing the homes to align with government carbon reduction targets and to the Future Homes Standard, expected to be adopted nationally by 2025.
The standard requires new homes to be fitted with low carbon heating and high energy efficiency with an average semi-detached home producing 75% to 80% fewer carbon dioxide emissions than one built to current Building Regulations.
The new housing would comprise: three four-bedroom semi-detached houses; eight three-bedroom semi-detached houses; nine two-bedroom semi-detached houses and two two-bedroom detached houses.
Councillor Marion Bradshaw, portfolio holder for safer communities, housing and wellbeing, said: "We are really pleased that much needed regeneration on this estate is now moving ahead.
"This scheme will bring about a big improvement in the quality of life for the people of this estate which has become very run-down over the decades since it was built in the 1970s."
Meanwhile work on another housing scheme for four new council houses in Saundby Avenue is also nearing completion.