Councillors voted to transfer the money to the new firm, called Cornovii, at a meeting of full council this afternoon.
The councillors also agreed to transfer two plots of land to the company, which was set up on July 6, to develop homes on.
The plots are brownfield land at Monkmoor in Shrewsbury and Ifton Heath in Oswestry.
Both of the sites have been identified in the company business plan for 2019–2020, which was approved at the cross-party councillors ‘Housing Supervisory Board’, set up to provide oversight at its inaugural meeting last week.
Robert Macey, Shropshire Council’s Cabinet member for housing and strategic planning, said: “It’s an extremely exciting time for the company and we now look forward to taking these two sites forward.
“Shropshire currently has a housing waiting list of over 5,000 individuals and families. This, coupled with an ageing population who want to live independently for longer, and people wanting to live closer to where they work, point towards just some of the needs we are trying to meet.
“It is important that we bring forward more affordable houses to sustain our local towns and villages. We have land, and it makes sense that we use this initially to build high-quality and spacious homes that people want, need and can afford.
“It will also help us to shape places and use any income to build even more homes and deliver essential services. We intend to work closely with town councils, parish councils, Shropshire-based businesses and partners to ensure that we build the types of homes that are needed and help boost the local economy.”
Subject to planning approval, work could begin to build up to 100 two, three, and four bedroom family homes as early as Spring 2020.
Councillor Macey added: “These two sites are only the beginning: the board will be considering a proposal to start feasibility studies to develop another site at their next meeting, and 48 more have also already been identified. It’s important that we keep the process moving.
“Some of the profit that the company makes will be used to buy land in future so that it can build homes in areas of our county that are unviable for private housebuilders.”