Two housing developers are getting a grant of £390,000 to help pay for the construction of 56 affordable homes.
The decision by the cabinet of the West Oxfordshire District Council is subject to agreement by the full council.
Oxford Citizens Housing Association which has started work on 48 homes at Dark Lane, Witney is to get £350,000.
The Home Group - building eight houses at Ducklington Mill - will get £40,000. The district has to meet a government target of 340 new homes by April 2010.
"We are doing all we can to increase the proportion of affordable housing in a district where prices on the open market remain some of the highest anywhere in the UK," said Councillor Jill Dunsmore.
At Dark Lane, 29 units will be for rent, 11 for shared ownership and eight for sale at a discount on market prices.
The Ducklington Mill development will have six for rent and two for shared ownership.
The council said that domestic property prices on the open market across West Oxfordshire averaged £400,000 for a detached house, £234, 000 for a semi, £225,000 for a terraced property and £177,000 for a flat at the end of June.