The sale to Holborn Properties is comprised of cash and non-market housing, valued at about $300 million.
The new housing will replace low-income housing units that were torn down in 2008 to make way for mixed-use, high-density towers.
The demolition forced all but four of 224 families from their homes, but the government says former residents will get the first option to move back into the new units.
The government says it will invest all of the net proceeds from the sale into social housing throughout B.C., with 50 per cent of the proceeds targeted for Vancouver.
A five-storey building with 53 apartments is currently being constructed at Little Mountain, and is expected to be finished in 2015.
Also on HuffPost