More than £2.4 million has been allocated to West Berkshire Council to help build hundreds of homes.
The funding is part of a government initiative to tackle the issue of stalled housing projects due to nutrient neutrality rules.
The money is intended to support the construction of more than 800 homes across the River Lambourn area.
The Local Nutrient Mitigation Fund, which is part of a £47 million boost, aims to ensure that the necessary housing developments do not harm the environment.
The fund will be used to protect rivers and habitats from the adverse effects of construction.
West Berkshire Council is one of seven councils in England to benefit from this funding.
The council will use the money to implement mitigation systems that will allow for sustainable development.
The initiative is part of the government's broader plan to deliver 1.5 million homes during this Parliament.
The government has identified nutrient pollution as a significant issue in various parts of England.
High levels of nitrogen and phosphorus are damaging natural habitats and wildlife, which can hinder housebuilding in affected areas.
The government has pledged to address this issue while continuing to deliver the homes the country needs.
Housing and Planning Minister Matthew Pennycook said: "We must build more homes across the country and unlock growth, but this must not come at the expense of our natural environment.
"Through this fund and alongside major reforms to the planning system, we will accelerate housebuilding and deliver nature recovery, creating a win-win outcome for both the economy and for nature."
Environment Minister Mary Creagh added: "Britain faces a housing and nature crisis.
"This new Government was elected with a mandate to get Britain building again and restore nature.
"That is why we will deliver a planning system that unlocks the building of homes and improves outcomes for nature."
Councillor Denise Gaines, West Berkshire’s Executive Member for Planning and Housing, said: "We are delighted to have been awarded funding to address Nutrient Neutrality mitigation solutions for West Berkshire.
"This will help the Council to find solutions to enable development to take place while minimising the environmental impact."
In addition to the new funding, the government has announced several measures to accelerate housing development and achieve the ambition of building 1.5 million homes.
These include an overhaul of the planning system, the launch of a New Homes Accelerator group, the introduction of 'brownfield passports', and the establishment of an independent New Towns Taskforce.
The government has also awarded £68 million to 54 councils to unlock housing on brownfield sites.
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