Approximately £1.2 million has been earmarked for the provision of drainage and utilities in the town which will unlock two parcels of land for housing and employment.
The money from a housing developer and Shropshire Council will allow work to go ahead at Tilstock Road and Heath Road.
It would include up to 500 homes, a new primary school, sports pitches and a business park, and has been identified as a priority project for Whitchurch as set out in the latest Place Plan document.
Gwilym Butler, Shropshire Council’s Cabinet member for communities, place planning and regulatory services, said: "The aim of Shropshire Council’s Place Plans is to enable us and our partners, working closely with local Shropshire Councillors, town councils and parish councils, to deliver the infrastructure needs of our communities.
"The project in Whitchurch is significant and will provide some basic but essential infrastructure that will enable the delivery of further housing and employment in the town.
"Agreement to grant Community Infrastructure Levy support to the project was given by cabinet in November 2018, and we look forward to seeing the project move forward over the coming months."
Outline planning permission to demolish Mossfields Farm and build up to 500 homes, plus a convenience store, new primary school and sports pitches was granted by Shropshire Council in May 2015.
Councillor Gerald Dakin for Whitchurch South said it is a relief to see the project finally moving ahead after more than a decade of discussions.
"This has been in the pipeline for about 12 years now but nothing has been done about the drainage issues down there," he said.
"There isn't the drainage capacity at the moment for what is being proposed so hopefully now the money has been sourced from the developer and Shropshire Council, it will finally go ahead.
"The plans are for 500 homes, a school, cricket pitches, football pitches and more. It all stacks up very nicely for Whitchurch and is very much needed. The sooner it starts, the better.
"It will also mean the Heath Road employment site will be unlocked for an industrial estate which would be a huge for the town."
The £1.2m Heath Road site is allocated as employment land, suitable for a wide range of commercial uses.
Shropshire Council said the drainage work would also kick-start the Chester Road development for 15 homes.