The first two houses arrived at the vacant Ranolf/Malfroy Rd site this morning.
The site was purchased by Kāinga Ora last year to help meet the high demand for housing in Rotorua.
Thirty-seven new homes will be built for the vacant 2h site as well as a community room and shared green space.
A Kāinga Ora spokeswoman said the first two houses were scheduled to be brought by truck early this morning from the BuiltSmart factory in Huntly where they've been built and fully fitted out.
Kāinga Ora Bay of Plenty regional director Darren Toy said today was exciting and a real milestone.
"I look forward to the day when whānau and tamariki can move into them in a few months' time once they've been connected to services and had porches, fences, roads and parking spaces installed."
The houses will be delivered regularly through to the end of June.
Completion at this stage is expected in July or August, dependent on Covid impacts.
The site has been empty since 1988 after previous owners' plans, including building a church and a high-end housing complex, didn't eventuate.
The Government has no concerns about the development on state land in Ngongotahā.