The contractor will build 150 new homes across three derelict sites in Low Hill. Construction is expected to begin towards the end of this year.
The schemes form part of the council's target to build 13,40 new homes across the city between 2006 and 2026.
Work will take place at the former Armitage Shanks Tap Works Factory site, as well as land on Fifth Avenue and Broome Road.
A mix of one, two, three and four bedroom properties will be developed, consisting of apartments, houses and bungalows.
The scheme at Fifth Avenue also includes two wheelchair accessible family-sized bungalows, which have been built, as well as a specialist supported housing scheme of 14 homes for people with mental health needs, which will be staffed at all times.
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Designed by IDP Architects, 40 of the homes will be council homes for rent, with the remainder to be sold as market housing.
Work on the council homes is expected to be completed in two years, with the market housing for sale scheduled to be finished in four years.
Cllr Peter Bilson said: "This project will give the Low Hill area a major boost and the proposals have been warmly welcomed by the Hawksford Residents and Tenants Association.
"It will be great to see these derelict plots being put to such good use.
"As part of regeneration plans for Wolverhampton, a target of building 13,400 new homes across the city between 2006 and 2026 has been set.
"This project supports the house building programme and will deliver quality homes for all."
Craig Tatton, Chief Operating Officer at Bouygues UK, said: "As well as providing high-quality new homes and regenerating derelict land, we are committed to delivering the maximum benefit to the community from this project by engaging with local suppliers, residents and training providers to offer new employment and upskilling opportunities through our National Skills Academy for Construction."
(LM)
