Eighteen affordable homes will be built in a Pembrokeshire village thanks to a grant funded by council tax premiums on second homes.
A community land trust in Solva will work with the county council and a housing association on the project.
Councillor Bob Kilmister, cabinet member for finance, said the land trust project was “ground breaking and the first of its type in Wales”.
A football field earmarked for the development will be replaced elsewhere.
The 18 homes will be designed and allocated to residents by housing association Ateb, in collaboration with the trust, with rural development organisation Planed also involved.
Council leaders heard that the development would “seek to ensure the scale and design of the housing is acceptable to the community”.
Mr Kilmister said that the community fully backed the plan for “much needed” affordable housing in the area and welcomed the innovative scheme.
“It’s slightly more complicated because there is no ‘road map’ [for such a project] available and we have had to create one,” he said.
The cabinet member for housing, councillor Michelle Bateman, said it was exactly the type of partnership the authority wanted to be involved in, saying it added “another arm” to housing provision.
Pembrokeshire’s cabinet also approved the long lease of land owned by the authority alongside the A487 at Bro Dawel for the development, according to the Local Democracy Reporting Service.