The affordable homes provider will develop 136 flats at the Derwent Point project.
The gross asset value of Derby housing provider Derwent Living's scheme is likely to reach £26m.
After buying land in Wakley Street, close to City University, for Derwent Point, the group plans to create more purpose-built homes for students.
Derwent Living's traditional territories are the Midlands, south Yorkshire and the south east.
Paul Wisher, Derwent Living's commercial director, said: "Our development of Derwent Point builds on our success as a student accommodation provider."
Wisher said that the company is well known for building affordable homes for students, claiming to be one of the best 11 providers on Savills' list.
Derwent Living already manages 4,000 students rooms.
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