Builders are to move into the former site of St Ilan Comprehensive to begin work on transforming it into a new Welsh-medium school.
The council is developing the Caerphilly town site into a campus for pupils aged between three and 16. Some post-16 classes will also be taught on the new campus.
The county borough currently only has one Welsh medium secondary school – Ysgol Gyfun Cwm Rhymni in Fleur de Lys.
Forecasts have shown there will be an overcapacity of almost 1,000 pupils by 2021.
In January this year, councillors voted to spend £3.5m to begin work on the first phase of the project. Year 7 pupils living in the Caerphilly basin will start at the new school in September 2013.
A report presented to councillors during January’s meeting warned that funding for the project from the Welsh Government – through its 21st Century Schools programme – was far from certain.
This is despite Cardiff Bay provisionally accepting revised proposals last year.
Under the revised scheme the Welsh Government would fund at least 50% of the cost – instead of the original 70%. According to the report presented to councillors, this would only be the case for spending made after April 1 2014 and not before.
This means the council could end up having to find £1.75m to fund the work.
If St Ilan was not open before September 2013, then at least 25 pupils wanting would be turned away from Ysgol Gyfun Cwm Rhymni. This would likely increase to 150 pupils by 2015.
The rising demand for Welsh-medium education places meant councillors from both the ruling Plaid and opposition Labour groups voted for the plans despite the uncertainty over funding.
To mark the imminent start of work at the site, Year 5 pupils from Ysgol Gynradd Gymraeg Caerffilli – who will be among the school’s first intake – recently met Cllr Phil Bevan.
The cabinet member for education said: “The imminent work at the former St Ilan site in Caerphilly will help to accommodate the increasing demand for Welsh places across the entire county borough.
“Meeting the children who are set to benefit from this development has further convinced me that the investment into Welsh medium education is the right move and we now look forward to the scheme progressing.”
The St Ilan scheme forms part of a wider £92million programme. The Welsh Government is providing £46million and this amount is being matched by Caerphilly County Borough Council.
It is expected that the funding will be made available over a seven year period from 2014 and will also cover the cost of closing three English medium comprehensives.
The council has yet to announce which comprehensive schools will close.