The existing block will be remodelled, adding an additional two-storeys. The outside of the building will have stained glass and varnished metal applied from top to bottom.
Northampton Borough Council and Northampton Partnership Homes (NPH) will offer the new flats – 70 one-bed and 52 two-bed – to key workers who work in the town centre.
NPH is in negotiations with Seddon, via one of itsframeworks, to undertake the construction works.
The building will be renamed The Clock House as it will have a clock tower that will light up at night. The council and NPH hope and expect that the development will help with the regeneration of Northampton town centre.
Helen Town, assistant director of asset management and development for NPH, said: “So many key places to work will be in walking distance: the hospital, fire station, shopping centres, pubs, businesses, food outlets... public or private sector, we want to give workers the opportunity to live in town. And if people live in town, they are more likely to spend in town too.”