The Strand East development, built around canals by Inter Ikea - the Swedish furniture giant's investment arm - is designed to be a "mini-Venice" with moorings, a water-taxi service and a floating cocktail bar.
It will feature a 130ft-tall illuminated wooden tower and form the gateway to the Olympic Stadium.
Harald Muller, business development manager at Inter Ikea, said: "It will be the newest and most interesting development in the whole area. The estate will be the antithesis of the converted athletes' village, where it has been claimed properties are so close you can "spit from one balcony to another".
About 40 per cent of the properties will be three-bedroom mews homes. The development will also feature courtyards, a public square, school, health surgery and nursery.
Demolition work has begun and stage one will see a three-storey restaurant, office block and gallery space open next spring. Planning permission for the houses has note yet been sought.
London Mayor Boris Johnson said: "This is yet another great example of the 2012 legacy rippling out of the Olympic Park and across east London."