Planning permission has been granted for 117 flat-pack affordable homes from Sweden to be built in Gateshead.
An artist's impression of the Boklok development
Councillors have given outline approval for the plan to construct the houses in Felling and it is believed to be the first such development in the UK.
They will be shipped over from Sweden and assembled opposite Gateshead International Stadium.
The timber-framed, open-plan Boklok flats and houses, will be sold at the Ikea store at the Metrocentre.
Alan Prole, the MD of developers Live Smart@home, said the homes are aimed at people on incomes of between £12,500 and £30,000.
Boklok was designed in the mid-1990s to address the need for affordable properties in Sweden and to provide people with quality properties at a low price.
It is believed that work on the first phase of 36 flats in six two-storey blocks will begin later in the spring.
Councillor David Napier, Gateshead council's cabinet member responsible for housing, said: "This is an exciting development and one that makes an important contribution to the debate on affordable housing.
"I'm delighted that the developers have chosen Gateshead to be the first UK development of a totally new type of home.
"These homes are cleverly designed, highly energy-efficient and they look fantastic, so I don't think there will be any shortage of potential buyers in Gateshead."
Homes will be offered on a shared ownership, below market rent basis, with legal agreements ensuring that buy-to-let will be actively discouraged.