The deal, which will see the redevelopment of the former Mayfield Inn, has been struck by Melville Housing Association and includes plans to deliver work for local contractors as well as training opportunities in the surrounding area.

The 20 high-quality affordable homes on the Bogwood Road site will also help meet the high demand for social rented properties in Midlothian, where there are currently over 4,000 individuals and families on the housing waiting list.

Andrew Noble, chief executive of Melville Housing, said the new homes will give a major boost to the Midlothian economy when work begins in the New Year.

He added: “There is huge demand for high-quality affordable housing in Midlothian, and also for investment to stimulate the local economy, so these 20 new homes will deliver a much-needed boost.

“We’re especially pleased that there will be opportunities for local contractors and we look forward to seeing the transformation of this derelict site into a new development that will benefit the whole community.”

Delivered by housebuilder ForthTay Residential Ltd, the new development is part of the Midlothian Strategic Housing Investment Plan (SHIP) and has been made possible thanks to a Scottish Government grant of £1.47m. The remainder of the project will be funded by Melville Housing’s own finance.

“This is a great opportunity to regenerate the site of a pub that has been closed for a number of years,” said Andy Rosher of developers ForthTay Residential Ltd. “Our building partners will be making use of local trades wherever possible and we’ll also be speaking to community organisations about exploring available training opportunities. When completed this development will look fantastic and we can’t wait to get started.”

The new properties, which are expected to be complete by early 2019, will mainly consist of one and two bedroom flats suitable for couples and single or older people. The homes will exceed modern energy efficiency standards and will also include solar panels for hot water and heating.