Hundreds of Roma (Gypsy) people who have spent six years in a makeshift Kosovan camp contaminated with lead are to be relocated and built new homes.
French peacekeepers have begun clearing the ruins of Roma homes
The 560 Roma have lived next to an old lead smelter in Mitrovica since the Nato bombing campaign in 1999.
Sweden is to donate 320,000 euros (£216,000) to help the Roma, with a similar sum donated by Germany.
Officials now hope to move the Roma to a new camp by the end of the year.
They will remain there until work has finished on rebuilding their original homes in the region around Mitrovica during 2006.
The Roma were driven out of their homes in nearby Mahalla at the end of the 1999 conflict by ethnic Albanians who viewed them as collaborators with the Serbs.
"These people were driven away from their houses and have been living on waste ground for the last six years and no-one really cares about them," Per Byman, Sweden's humanitarian director, told the BBC News website.
Work is due to begin next week on temporary homes at a former French military base, Mr Byman said.
The aim is to move the Roma away from the lead smelter, which they blame for a series of health problems, especially among children.
"Children are being born dysfunctional, with limbs missing and so on," Mr Byman said.
"Now we hope their quality of life can be improved."
Once they have moved, the Roma will have access to hot water, electricity, job training and medical assistance.
Levels of lead poisoning among Roma in camps at Zitkovac, Kablare and Cesmin Luq are currently classed as an "acute medical emergency" by US medical authorities.