Housing New Zealand contracted Creating Communities to buy 156 state house sections in 2013, in order to build 260 new homes on the sites.
Seventy-eight of the new homes will be owned by Housing New Zealand and the remainder will be sold.
The project was conceived as a catalyst to encourage investment throughout the area, Housing New Zealand says.
Of the 156 old state houses, 41 were initially earmarked for demolition.
Fourteen homes were taken to Springhill Prison to be refurbished by inmates and 11 have been relocated to Kaitaia for the He Korowai Trust home ownership scheme.