Fareham Borough Council approved plans submitted by Imperial Homes to rebuild the disused brownfield site.
According to residents, the site attracts squatters, fly-tippers, drug use and anti-social behaviour.
In a public comment in planning papers, local resident Lorraine Perren said: ‘Excellent use of an eyesore brownfield site for affordable and local housing directly in the town centre.'
She praised the ‘good family homes rather than flats with allocated parking and gardens, plus easy walking and cycling access to schools, work and social occasions’.
The apparent years of neglect have made the land an eyesore to residents, according to Mark Gilbert from Pearsons Estate agents.
‘Having walked past the site on numerous occasions, I have noticed fly-tipping, evidence of squatters and anti-social behaviour,’ he said.
‘The proposal will undoubtedly introduce more patrons to shops, restaurants and leisure facilities, and of course, contribute towards the expanding infrastructure.
‘Whilst I appreciate 18 new houses will not solely keep the town centre thriving, it would be a great step forward.’
The site was originally part of the Tesco superstore before being sold off to Hanover housing which didn’t act on planning consent to build 60 houses.
Councillor Katrina Trott, who is on the planning committee, welcomed the long-awaited development.
‘It was always hoped to be developed and this is excellent, I know the planning officer has worked very closely with Imperial Homes to ensure that the best possible arrangement was drawn up,’ she said.
‘I’m always concerned about the need for housing on brownfield sites.’
Imperial Homes said it is delighted to have secured planning permission.
In a statement, the developers said: ‘The application which was taken to the December planning committee with a recommendation for approval, was unanimously passed by the members.
‘The project is an important town centre development, and boasts a range of two and three-bedroom houses.'
Work is expected to start before the end of March, and be finished early next year.