A ground-breaking ceremony was held with Housing Minister Brandon Lewis to mark the start of construction on Thursday, 31 March.
Curo Group has outline planning permission for up to 700 homes at the former Ministry of Defence (MoD) site near Foxhill, Mulberry Park.
Other features include a new primary school, nursery, community facilities and employment space.
Detailed planning permission has now been granteed for the first 275 new homes, of which 30% will be affordable.
The project is a partnership between Curo, Bath & North East Somerset Council (B&NES), the Government and the local community, supported by the Homes and Communities Agency.
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It will help B&NES achieve its target of 13,000 new homes by 2029.
Victor da Cunha, Chief Executive of Curo, said: "After three years of consultations and discussions with local people and Bath & North East Somerset Council, it's exciting to see work finally start on the Mulberry Park development.
"When Curo bought the former MoD site in 2013 we had a vision not just for the vacant land but the wider Foxhill community. We did not want to see a private developer come in and build a separate community. At Curo we want all local people to share the social and economic benefits of the regeneration.
"The new housing, school and community facilities at Mulberry Park, combined with our ambitions to regenerate part of the existing Foxhill estate, will enable us to provide quality homes that meet people's needs now and in the future.
"The scheme will also help create an integrated community with improved transport and infrastructure."
Last year, the Government designated Mulberry Park as a Housing Zone (one of 19 across the UK). Covering the former MoD site and the proposed regeneration of the Foxhill estate, the zone attracted over £300,000 of extra funding from central government designed to accelerate the delivery of housing.
(LM/JP)
