Twenty homes will be constructed on the former site of St. Patrick's Primary on Fisher Avenue, with the tender for the work due to be issued early next year.
Scott Johnson, chairman of Kilsyth Community Council, said: "It's a necessary addition to the housing stock in the town because I think we're making significant strides ahead with the work that's being done on Main Street and the fact that many of those houses will be social housing. It'll certainly go some way to alleviating at least part of the waiting list backlog.
"It's a gap site and a brownfield site and in terms of that, it's well within the boundaries of the town. Far too often greenfield sites outside are targeted because it's easier to develop on. But this is owned by the local authority and I'm glad it was the primary candidate for the development."
The construction project is part of North Lanarkshire Council's 80 million 'Building for the Future' programme.
The scheme will see 500 new homes built throughout the local authority area by 2015.
Councillor Jean Jones said: "I am looking forward to new council houses being built in the Kilsyth area. Hopefully this will be the first of many for the area and will see much needed movement on the waiting list.
"In January 2011, Clyde Valley will be offering houses in the Main Street at a market rent on a Short Assured Tenancy which gives another opportunity for people to move on."
Cumbernauld and Kilsyth MSP, Cathie Craigie, was pleased with the announcement.
She said: "This is great news. There is absolutely no doubt that when it comes to council houses the demand outweighs the supply, so the additional houses are certainly welcomed.
"It is also important that we support our construction industry, which has suffered greatly as a consequence of scaling back capital projects across the country. These new houses will assist our builders, plumbers, joiners, and others across the industry, something that is thoroughly positive."
Councillor Barry McCulloch, convener of the committee who approved the work, said: "It's been a very successful year for our new build programme with significant progress being made in delivering our ambitious plans.
"Our homes will bring not only much needed affordable, high quality houses to North Lanarkshire, but provide additional community benefits, investing in local people and local businesses."