The site of the 71-unit, two-block complex in Galway Street, Onehunga was officially unveiled by Minister Twyford.
Designed by Ashton Mitchell and built by Bracewell Construction, the 52 one-bedroom and 19 two-bedroom homes will be spread over two four-storey buildings.
Minister Twyford said the development points to the future of state housing in New Zealand. "Housing New Zealand has been progressively replacing older, worn out homes, which were built for a family of one size, with an incredible variety of buildings which can cater to virtually any tenant’s needs.
"In this building, seven units on the ground floor will cater to tenants with mobility issues, requiring accessible designs including ramps, wider doorways, and other specifications.
"The design also includes a community room and space for on-site staff, meaning the development will be able to cater to a more intensive level of tenant support," said Phil Twyford.
Galway Street will be completed in mid-2020 and will be among the 6,400 state houses to be built over four years following funding in Budget 2018.