CRAWLEY Borough Council has agreed to sell land for £3 million to allow the construction of the town's "14th neighbourhood" to get under way.
The deal with developer Crest Nicholson paves the way for 2,500 new homes.
But there has been criticism from opposition councillors who believe the council should have held out for more money.
Although the site is on the outskirts of Crawley – lying to the west of Bewbush – the neighbourhood, called Kilnwood Vale, will be built on land within Horsham District Council's boundaries.
Planning permission had already been granted for the development in March but its construction hinged on access roads being built within Crawley's boundaries – and on the council's land.
The sale of the three parcels of land totalling 3,147 square metres – near Sullivan Drive, Bewbush; close to Woodcroft Road, Ifield; and north of Horsham Road – was approved at a full council meeting last Wednesday (October 19).
The £3 million will be paid to the council in three instalments of £50,000, £450,000 and £2,500,000.
As part of the deal Crawley Borough Council will be allocated 145 of the affordable homes which will be built by the developer. Seventy per cent of these will be shared-ownership homes while the remainder will be rented accommodation.
The money raised from the sale of the land will be used to convert the shared-ownership homes to rented accommodation and to subsidise the cost of rent to tenants.
Each unit would cost approximately £30,000 to convert.
Labour councillor Peter Lamb, who represents Northgate, opposed the sale, believing it to be a bad deal for Crawley as the land could have been sold for considerably more.
He said: "It won't even begin to dent the local need (for social housing). Short-term provision is not acceptable.
"If we are going to sell out to people I'd hope to do it for a damn sight more than is being offered here."
But Brenda Burgess, the Conservative councillor for Three Bridges, said: "I think it's an excellent deal for Crawley and its housing needs."
Crawley's Labour leader, Brenda Smith, said she was concerned a second phase of development could come out of the deal.
She also raised fears that the development's residents would be paying council tax to Horsham District Council but would be more likely to use Crawley's facilities.
It is hoped that construction could start as soon as next spring – with access roads to be built first.