Limerick City and County Council will utilise the funding to reduce its portfolio of 178 long-term derelict houses.
The funding is coming from the repayment of a loan given to Limerick Twenty Thirty for the development of Troy Studios in 2016, which is now being repurposed for housing projects.
Limerick Twenty Thirty has now paid back the loan for Troy Studios of just under €6.5 million to the Council following the outright purchase of the film studios by Hackman Capital Partners and Square Mile Capital Management.
The option to purchase Troy Studios was exercised by the new owners this summer.
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Limerick City and County Council has now decided to use the loan to be repurposed as part of the Voids, Vacancy and Retrofitting Scheme for the Council's social housing stock, following agreement by the councillors.
The original loan has a fixed interest rate of 1.75% over 30 years, which is much lower than the current interest rates available if the Council was to apply for a similar sized loan.
Welcoming the decision, Mayor of the City and County of Limerick Cllr Francis Foley said: "I'm delighted that my fellow councillors and the officials of the Council have taken the correct decision to help tackle the housing crisis. The prudent thing to do is to repurpose the loan into housing. The interest rate is very low and we would not be in a position to get the same rate if we went to the market now.
"It is now incumbent on the officials to get that money working as soon as possible and refurbish these homes as demand for social housing is huge."
Work is to begin immediately on the properties.
Caroline Curley, Director of Housing in Limerick City and County Council added: "We are delighted that the councillors saw fit to repurpose the loan so that we can deal with vacant houses around the city and county. We will be starting immediately on refurbished the properties, which will allow 178 families across Limerick to have a home sooner than we would have anticipated."
