Homes just ten years old will be demolished in a proposed £4.5 million development scheme.
The 29 prefabs will be replaced by 36 permanent houses at Wiston Road in East Brighton.
Councillor Tehmtan Framroze, the city council's Cabinet member for housing, agreed to sell the site for £750,000 to a housing association for a development which will later have to be approved by the policy committee.
Most people in the existing homes, which were only designed to last ten years, want to move into the new homes.
They are also taking part in discussions about the design and layout of the new scheme.
Coun Framroze said: "This redevelopment is designed to ensure the quality of housing meets the decent standards residents will expect for years ahead.
He said the scheme was intended to provide housing that would be accessible to disabled people.
If possible, the scheme will be designed to be powered partly by solar energy to reduce costs and be environmentally friendly.
New Deals for Communities will be asked to contribute money.
Coun Framroze said: "The council had good service from the prefabs but they have reached the end of their cost-effective lives."
He added local labour would be used as far as possible and the scheme would provide many people with construction jobs.
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