The Welsh Government has agreed a contract with developers Barratt Redrow to deliver 576 new homes on land at Upper Cosmeston Farm.
Concerns have been raised about the development, described as the biggest net-zero housing project in the UK, including its potential impact on traffic and a loss of green space.
But ministers say the scheme will play an important role in tackling housing shortages and achieving its net zero ambitions.
Housing Secretary, Jayne Bryant, said: "This landmark development sets a new standard for sustainable housing not only in Wales but across the UK and beyond."
"This isn’t just about building homes – it’s about creating thriving communities and tackling the climate emergency head-on. Our net zero policy is driving real investment and real change in how we build the homes Wales desperately needs."
"The agreement with Barratt Redrow represents a significant step-change that shows what’s possible when we put people and our planet first and I’m particularly pleased with their commitment to delivering training and apprenticeships, helping to build skills and careers for the next generation."
Barratt Redrow chief executive David Thomas added: "It will be an exemplar development and a great place to live, with fantastic community facilities, a strong commitment to affordable housing, and cutting-edge sustainability credentials."
"Every highly energy efficient home will be heated by a ground source heat pump and powered by photovoltaic panels and batteries, cutting carbon and bills for future residents."
But with the population of the area set to increase by the hundreds, many existing residents and councillors are worried about the impact this will have.
The Welsh Government had considered whether or not to call in the plans.
Cllr Kevin Mahoney, an independent, told a planning committee meeting last year there were no places at schools, dentists, or GP surgeries in the area at the time and said the road infrastructure was “falling to pieces”.
He added: “We know full well that the road can’t take any more traffic.”
The plans for Upper Cosmeston Farm site show it will eventually include a primary school, public open space, and other community facilities.
One Vale of Glamorgan Council planning officer told a meeting last year that there is an opportunity for health service needs to be catered for at the site in the future.
Residents have also raised concerns about the impact the development might have on the nearby Wales Coast Path and the loss of agricultural land.
But the Welsh Government argued the homes will help the Vale of Glamorgan tackle its housing crisis.
In March 2025, Vale of Glamorgan Council said there were 7,217 households on the council housing waiting list - up from 6,930 households in September 2024.
The Welsh Government said 219 of the new homes at Upper Cosmeston Farm will be available for social rent.
Cardiff University has been appointed to independently assess and verify data that monitors the zero carbon performance.
Property firm Savills, said Barratt Redrow's commitment to the new development is though to be the first of its kind in the UK.
Cardiff Development director Scott Caldwell said: "It represents a significant investment and harnesses a raft of industry expertise and knowledge to help demonstrate how delivery standards can be implemented at scale to support the Welsh Government’s journey towards net zero."
“Learning from the Cosmeston journey is expected to help inform how development can deliver to more stringent environmental standards into the future.”
Additional reporting by the Bro Radio Newsroom
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