Work to transform six acres of land into a £15 million housing development after planning approval was granted by Leeds City Council.
The 61 houses will be built on land just off Albert Road by developer Redrow Homes.
Permission to build on the site was first granted in September.
But Morley councillors initially objected to the development due a lack of affordable houses being included in the plans and the possibility of losing green space land.
And a revised plan was approved last month.
Coun Robert Finnigan said Morley councillors had secured a £1.5m deal with developers for community improvements.
He said:“After the Planning Authority gave planning permission we negotiated hard to get the maximum community benefit we could. This included 15 per cent of high quality affordable housing.
“We believe we have obtained the best deal possible for local residents.”
Coun Finnigan said there had also been concerns about more traffic using Albert Road and over development of the town putting a strain on local services including schools and health centres.
The package from Redrow will see £1.5m spent in the community on projects including road safety improvements and speed restrictions put in place on Albert Road.
Coun Neil Dawson said:”The retention of a green space and woodland in the area is welcome and this development will improve the area that was once a spoil heap for Morley Main colliery.”
Nine of the new builds will be affordable housing, valued at just over one million pounds.
Matthew Barker, land director of Redrow Homes said: “This development in Morley further emphasises our commitment to building high quality, sustainable housing in great locations. It will help to meet growing demand.”