The £3 billion funding supports the Mayor of London's commitment to build 55,000 affordable homes by March 2015, and to bring 45,000 existing social homes up to standard across London, as well as supporting the Mayor's plans for the Olympic Park.
From April 2012, the activities of the Homes and Communities Agency in London devolve to the Greater London Authority, including the management of London's affordable housing programmes.
The Mayor of London will also establish a Mayoral Development Corporation to oversee the long term development of the Olympic Park and surrounding area.
These responsibilities were transferred to the Greater London Authority following the Localism Act 2011.
Local Government Secretary, Eric Pickles said:
"This settlement hands real power to London allowing Londoners to manage their own affairs. It goes hand in hand with the new localism powers and spending freedoms we are handing councils around the country so they can be as efficient and effective as possible with public funds."The Mayor published a draft revised London Housing Strategy for consultation in December 2011. The consultation period closes on 6 March 2012.
"The lasting legacy from the Olympics will showcase the regeneration and house building achievements that ensures London remains a truly great city."