Homes England has granted £38.2m of funding to six local authorities to encourage greater use of modern methods of construction (MMC).
The money will be used by six councils to develop infrastructure and enabling works for the construction of some 2,000 homes.
The funding has been awarded through the Local Authority Accelerated Construction programme, which is designed to help authorities to deliver homes at a pace faster than the local market average.
One of the stipulations for the councils to receive funding is that they commit to using MMC in the housing projects. These include at least one of either volumetric offsite construction, precast concrete, panellised construction or sub-assemblies and components.
Cheshire West and Chester Council was the biggest beneficiary, receiving £14.7m of funding for five sites, while North Somerset will receive £11.3m for three sites. The other four councils to get a slice of the money are Bournemouth, Christchurch and Poole; Bristol; Hastings; and Hull City.
Homes England chief land and development officer Stephen Kinsella said the funding would help to bring forward the construction of homes on the sites, which would "be built out at pace using modern methods of construction".
The announcement comes as housing minister Esther McVey (pictured) revealed the government was planning a 'centre of excellence' for MMC in the North of England. The centre would include a "new network of people, connected in their aim to boost the use of MMC while also sharing ideas and future uses".
Ms McVey added: "We must invest in this new technology. It's as simple as that. The benefits are clear. Some modular homes can be built in a factory over a week and assembled on site in a day."
The minister added that the MMC industry could ultimately be worth an estimated £40bn to the UK, calling it "a new post-Brexit industry".
Turner and Townsend head of industry strategy Bill McElroy said the announcements showed "welcome support from government" for the offsite agenda, which linked "aspiration into policy".
"What is also particularly striking is the proposed location of the 'centre of excellence' for MMC, which will be central to support economic growth and the devolution agenda in the North of England."