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The £1.7 million first phase, which launched in July, will see 12 homes completed on time and within budget by spring 2016.
A further 20 homes to be built over another 4 derelict sites are now in the pipeline as part of a second phase.
The works will again be carried out by the council's Strategic Construction Partnership (SCP) contractors - Wates Living Space and United Living - who were both given the opportunity to apply their skills in housing development as part of the pilot project.
The proposed new sites, which will be subject to site investigations, checks and public consultations, are Harrowby Road, Bushbury North; Lord Street, Bilston North; Brooklands Parade, East Park; and Clare Crescent Open Space, Spring Vale.
The builds will be funded by £2.08 million from the Housing Revenue Account (HRA) capital budget and £930,000 from 'Right to Buy' receipts.
Councillor Peter Bilson, Deputy Leader and Cabinet Member for City Assets, said: "This scheme is helping smarten up neighbourhoods in the city while providing affordable housing to residents in housing need, and for vulnerable people.
"The pilot project has been a great success with the contractors delivering what we asked of them.
"It has proved to be an effective way to deliver new homes and, crucially, increases the city's houses stock when it needs it most."
The first phase will see Wates Living Space complete 7, 2 bedroom, 4 person homes across 3 small sites at Hughes Road, Redcotts Close and Welbury Gardens; while United Living are developing five wheelchair compliant bungalows - appropriate for older people with limited mobility - at Sunset Place.
The scheme is monitored through a joint project team from City of Wolverhampton Council and Wolverhampton Homes, to ensure the new council homes are built to a high standard.
Richard Baker, Business Unit Director (West Midlands) for United Living, added: "We're honoured that City of Wolverhampton Council has recognised our commitment to this scheme during its pilot phase.
"We see this is an exceptionally important project for Wolverhampton as it will bring some much needed affordable new homes to the market, and benefit those with limited mobility too."
Stewart Reid, Business Director for Wates Living Space's Maintenance division, said: "We look forward to continuing our excellent working relationship with City of Wolverhampton Council following the success of the pilot scheme.
"Our skills and experience in building energy efficient homes to an exceptional standard will be utilised in order to enhance the quality of life for local residents."
- released: Friday 18 December, 2015