Twenty-thousand square feet of business units are set to be built in Ty Du near Nelson.
The new units are expected to be completed by autumn 2020 and are part of a wider plan for the regeneration of the Ty Du site.
The project is being backed by £1.3 million from the European Regional Development Fund.
The project, which was announced on Friday, March 1, is a partnership agreement between Welsh Government and Caerphilly County Borough Council.
Deputy Minister for Economy and Transport Lee Waters said: “Today’s announcement is good news for Nelson and the region more widely.
“Through genuine collaboration between Welsh and local government, this substantial site will be given the facilities needed to deliver on its economic potential and provide the infrastructure and services needed to attract businesses and jobs to the area.”
Mr Waters added: “Sought after business units of this kind form an important element of our Valleys Taskforce, which looks to keep, attract and nurture jobs and prosperity in the wider Valleys region.
“Alongside my focus in supporting and growing the foundational economy, keeping supply chains local, and facilitating better jobs closer to home – it’s an important part of a necessary multi-faceted approach to tackling the issues of the past and securing lasting economic change.”
Caerphilly AM Hefin David said: “There are a shortage of business premises for small firms in the area. I’m delighted that the Welsh Government have prioritised the north of my constituency for new buildings.
“This complements the work I’ve been doing with Wayne David MP to develop the economy in the northern valleys.”
Deputy Leader of Caerphilly County Borough Council, Cllr Sean Morgan said: “The Ty Du site in Nelson has been earmarked for industrial development for many years, so the news that this regeneration scheme is taking a significant step forward is very good news indeed for the area.
“The development will bring high quality business units and new homes to this key strategic site, which is well connected to local infrastructure.”
“This announcement is yet another vote of confidence in Caerphilly county borough as being a great place to do business.”