The latest stage on the ongoing transformation of the Glasgow’s East End will see 550 homes constructed on the site of the former Dalmarnock Power Station, it was revealed today.

Clyde Gateway has sold the 22 acre (8.9 hectare) Dalmarnock Riverside site to Link Group in a deal worth £5.7 million, paving the way for what has been a vacant and derelict area on the banks of the River Clyde to come back into use for the first time in almost 40 years. The funding for the acquisition by Link was provided by Glasgow City Council.

Link will now press ahead with a six-year investment programme worth £65m that will see a comprehensive housing mix of various sized units across different tenures including social rented, shared equity and family homes for sale.

Lord Smith of Kelvin, chair of Clyde Gateway, said: “This deal epitomises what Clyde Gateway is all about. We have stepped in to deal with market failure and having initially purchased the site and followed it up with a spend of £3m on decontamination and infrastructure improvements beneath the surface, we have now found a very able and willing development partner who will deliver the types and quality of housing that the community here requires.

“These 550 homes will complement perfectly the nearby Athletes’ Village. What we are seeing and experiencing here in this area is a truly world-class transformation with the likes of Dalmarnock railway station - which recently underwent an £11m refurbishment - the community-owned Legacy Hub, the Emirates Arena and Sir Chris Hoy Velodrome, the Police Scotland building and the soon-to-be-built nursery and primary schools making an unbelievable difference and fulfilling the legacy promises made when Glasgow first bid for the Commonwealth Games.”

Roy Stirrat, chair of Link Group Limited, said: “We are delighted to have been supported by the Scottish Government and Glasgow City Council to enable us to lead on the Dalmarnock Riverside development. This regeneration project will provide high quality cross -tenure housing opportunities for Glasgow’s East End.

“Link has a design philosophy which embodies Clyde Gateway’s masterplanning aims of high quality buildings and open space, creating a vibrant and cohesive and sustainable community. Working with our partners and stakeholders, Link aims to develop the site delivering a range of community benefits, including up to 76 jobs new to the Clyde Gateway area, which will provide a lasting legacy for the Dalmarnock area and the people living there.”

Link has been involved in this area for a number of years, having delivered some of the first built properties for Shared Ownership in Scotland in Bridgeton in 1980 and more recently supported the provision of new social housing in Oatlands while helping the Oatlands Development Trust get established.

Councillor Gordon Matheson, leader of Glasgow City Council, said: “Dalmarnock Riverside is the latest example of the remarkable regeneration of this part of Glasgow. The exciting proposals for this development will mean 550 high-quality homes for sale, social rent and shared equity, and I am sure this will complement all that has already been achieved in the area over the past few years, a period that has seen a stunning renaissance in Dalmarnock.”

Housing minister Margaret Burgess MSP said: “The Scottish Government has provided £181 million to Glasgow City Council over the last three years for its affordable housing supply programme. This allowed the council to fund Link Group Limited’s acquisition of the Dalmarnock site for affordable homes.

“This development complements the significant investment already made in the Commonwealth Games Athletes’ Village, which delivered 700 new affordable homes and a care centre. I am delighted that the funding of this project will make use of surplus, public sector land that meets local housing needs.”

Dalmarnock Power Station was, for decades, a landmark structure whose chimney dominated the East End skyline. It was built in 1915 and expanded on two occasions in 1921 and 1935 to meet the ever growing demand for power across the city. It was such a strategic component of the city and national economies that it was targeted by enemy aircraft during the Second World War. The power station suffered only superficial damage, but bombs landed on adjacent tenements with loss of civilian lives.

It closed in 1977 and was demolished in 1980, but such was the strength of the structure that it took three attempts to bring down the chimney in a controlled explosion. The site subsequently lay vacant and derelict, often used for illegal dumping and fly tipping, before being purchased by Clyde Gateway in 2010.

The first stage of the work to bring the site back into use saw a 12-month remediation programme by Clyde Gateway in 2011/12 for the removal of thousands of tons of concrete and steelwork which was left behind below the surface when the initial demolition took place – as well as clearance of Japanese Knotweed and the installation of a new sustainable drainage system to support regeneration efforts across the wider Dalmarnock area.

Link will build the site out on a phased basis with the first phase getting underway in 2016 and overall completion due in 2021/22.