Telford & Wrekin Council has announced that it has secured the funding from the West Midlands Combined Authority.
The grant will allow building on previously used derelict land to start.
Work on the sites has stalled because of the high costs for developers to bring brownfield sites back into use.
The funding will support remediation, making sites viable and making them more attractive to potential investors.
It is thought the grant will help to deliver about 540 new homes and will see 14 hectares of brownfield land developed.
It will also create about 240 construction jobs.
The council says the vast majority of sites that can benefit have already been granted planning permission for new homes.
A small number of other brownfield sites that could potentially access the money have also been identified for housing in the local plan.
The investment will stop undeveloped sites blighting areas of the borough and will provide much needed new homes with the borough’s population set to grow in the next 15 years.
Councillor David Wright, Telford & Wrekin Council’s cabinet member for housing, transport and infrastructure, said: “I very much welcome this money which will enable residential development on brownfield land to support the growth in inward investment across the borough.
“As more jobs are created by industrial developments as a result of the Land Deal, we will need a bigger workforce and consequently more houses and this money will be a big help.”
Developers will need to approach the council to apply for a portion of the grant.
The council says the grant is available for sites that have stalled and have abnormal development costs associated with poor ground conditions.
Anyone who has a stalled site or is looking to develop brownfield land can contact Gavin Ashford on 01952 384260.