Lester said some will be social housing managed by community housing providers, and others will be affordable rentals targeting the lower end of the market.
"We'll work with buildings owners and developers who can provide refurbished space. This means we will be able to retrofit existing inner city buildings and turn them into warm, safe, dry apartments.
"This approach is already used by some developers to retrofit buildings into hotels or student accommodation. We want to support this to happen for affordable rental housing."
The mayor said the aim is for more Wellingtonians to be able to afford to live in the heart of the city.
Deputy Mayor and Council Housing Portfolio leader Paul Eagle said the plan was expected to pay for itself over the lifetime of the project.