The mill building in Reddish will be transformed into 152 one- and two-bedroom apartments, while a village of 49 new homes will be built alongside.
Keepmoat Regeneration, part of the Engie Group, has been chosen to deliver the scheme on behalf of DeTrafford.
The development, to be called Elisabeth Gardens, is set against the backdrop of Houldsworth Golf Course and will also include the provision of shared amenity spaces, such as communal gardens.
Frank Mondino, northwest area director for Keepmoat Regeneration, said: "This impressive building has lain derelict for a number of years and so we're excited to be investing in the area and creating a thriving new community. We will not only be providing new housing solutions, but throughout the build process, there will be considerable employment and training opportunities for local people.
"There is a clear demand for new homes in the region and we are passionate about working with our partners to not only secure derelict land, but look at ways of regenerating existing areas and restoring current infrastructure.”