More than �7.7m is to be spent building 182 affordable homes in west Dorset over the next two years.
Forty-three shared ownership and 139 rental properties will be built, most of them will have one or two bedrooms.
Under the new investment, more than three times as many homes will be built compared to the previous two-year programme, which saw 51 new homes.
The investment forms part of the government's national affordable housing programme.
Thirty-four homes are planned for rural west Dorset while the rest will be built in towns.
Funding has also been earmarked for a 45-bedroom extra care housing scheme for elderly people on the former Eldridge Pope brewery site in Dorchester.
Robert Gould, West Dorset District Council leader, said: "Tackling the shortage of affordable housing in west Dorset is the district council's top priority."
The district council said it is also reviewing land it manages on behalf of local people to identify where more affordable homes could be built in the future.
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Tackling the shortage of affordable housing in west Dorset is the district council's top priority
