Developer Lend Lease has submitted an outline planning application for 2,500 new homes in Elephant & Castle.
Lend Lease said that 25 per cent of the new homes on the development would be provided as affordable. The masterplan for the Heygate estate also proposes new shops, restaurants, community facilities and a large new park.
The developer's managing director of development (EMEA) Mark Dickinson said: "Elephant and Castle is one of Europe's most exciting regeneration projects.
“London desperately needs new homes and Lend Lease is proud to be playing a part in helping the capital to meet the growing demand.”
Fiona Colley, cabinet member for regeneration at London Borough of Southwark, said: "Transforming the Heygate is a hugely important cornerstone to Southwark Council's £1.5 billion regeneration plans for Elephant and Castle.
“We welcome the planning application, which will be considered by the council's planning committee, as making further steps towards the long-awaited vision for the area that residents look forward to seeing become a reality."
It is anticipated that the first phase of construction will begin in 2013, subject to planning permission being granted.
A new website for the local community, which explains the council's plans for the regeneration of Old Kent Road, has been launched