Ten new social houses are to be build in Roundstone.
The Department of Housing, Planning, and Local Government has granted stage one approval for the new homes, with a recommended budget of €2,450,930.
The approval will allow the county council to appoint a design team to advance the project.
The news of the project was revealed at Monday's monthly meeting at county hall and was welcomed by councillors.
County cathaoirleach Eileen Mannion said; "The building of 10 houses will be a huge boost for the area of Roundstone. We have a housing crisis at the moment and we have been fighting for more social houses for a long time. We should be very happy."
Fine Gael councillor Niamh Byrne said she was very pleased with the development and that it was great news for the area.
However, independent councillor Tim Broderick questioned the cost of building the houses at an average of €245,000 per unit.
Director of housing Michael Owens clarified that the amount included side costs for which the Department of Housing would foot the bill.
He said; This news is very welcome and the €2,450,930 is an estimated cost for an estimated amount of units whose number may go up or down over the course of the planning application.
