The £5.4m redevelopment of East Oxford Community Centre will see a complete refurbishment of the Old School building on the corner of Cowley Road and Princes Street.
The Fusion Arts buildings will be demolished to make room for a three-storey, low-carbon building to take its place.
Over recent months, Oxford Direct Services has been clearing the area and preparing for construction.
The process included the removal of asbestos and the demolition of unsafe, ageing buildings.
The council has also commissioned OX Place to develop 12 energy-efficient flats for social rent next to the community centre on Princes Street.
Linda Smith, cabinet member for housing and community centres, said: “I’m so proud to see this project to deliver new, modern facilities for east Oxford’s communities kick off.
“East Oxford is one of the most diverse areas of our city, and the community centre is such an important hub at its heart.
“The new centre will bring a number of great facilities and benefits for the community, and we look forward to welcoming existing and new users.”
The social rent flats will offer occupants one or two bedroom options at about 40 per cent of equivalent private rents.
Additional work is also expected in Collins Street, where OX Place will develop 14 new homes for shared ownership, starting in April.
The sale of these homes will help finance the redevelopment of the community centre.
Simon Howick, managing director at Oxford Direct Services, said: “Oxford Direct Service is pleased to lead on the redevelopment of East Oxford Community Centre, which will make a real difference for the community.
“Through careful planning and execution, we are enhancing the existing infrastructure and adapting the building to make the most of communal spaces where the community can gather, connect, and thrive.”
The redevelopment of the East Oxford Community Centre and construction of the new council homes are set to be completed by the summer of 2025.
The shared ownership homes in Collins Street are also expected to be ready by the same period.
Helen Horne, managing director, OX Place, added: “Our mission is to deliver design-led, sustainable and most of all affordable homes for the people of Oxford.
“Cowley Road is the beating heart of East Oxford and it’s an honour to be helping Oxford City Council deliver 12 new council homes and 14 shared ownership homes here.”
For more information on the project, visit the council website.