A deal has been struck that will see more than 200 homes built and land developed in a move that could eventually help create more than 1,500 jobs.
Property firm Waystone will receive a £2.8 million loan to help develop the 50 acre site, known as “Super G”, between the railway and the M62 at Glasshoughton.
It is the latest phase of the redevelopment of the colliery and coking works which is now home to the Xscape leisure and retail complex.
The money to support the development is coming from the Government’s Homes and Communities Agency (HCA) and the Leeds City Region Local Enterprise Partnership (LEP).
Waystone chief executive Stuart McLoughlin said the deal would extend a public-private partnership that had lasted 16 years and led to a “transformation” of the area.
Tom Hawley, area manager at the HCA, said: “It is great news that the public sector is able to help kick start the next phase of private sector driven economic growth at Glasshoughton.
“This area has seen real transformation over the last decade thanks to the public-private partnership with Waystone 32 and our previous investment of £9.6m from the National Coalfields Programme.
“These new jobs and homes will make a real difference to local people and will build upon the 3,800 jobs already created.”
Car supermarket chain Motorpoint has already secured planning permission to open a new outlet on the site covering seven acres.
Housebuilder Taylor Wimpey is taking a further 16 acres of land which it will use to build 238 family homes.
The Leeds City Region LEP brings together the area’s councils and business leaders to work together on growing the local economy.
Roger Marsh, chairman of the Leeds City Region LEP, said: “Super G demonstrates that funding from the Leeds City Region’s Growing Places Fund is having a direct impact on the city region economy and I am delighted that once again the LEP is supporting new business opportunities.
“Without this funding, it is unlikely this project would be off the ground which highlights the relevance of the LEP to the regional economy and job creation.”
Repayments on the loan to Waystone will be used by the LEP to reinvest in other projects that help create jobs around the region.