Plans for 24 three and four-bedroom homes and the formation of an earth mound in an old quarry in Fernham Road, Faringdon, have won planning approval.
But building work will not be allowed to start until a land decontamination programme costing £388,000 is carried out.
The old Coxwell Pit has been used as a refuse tip and, in recent years, as a scrapyard, but part of it is a wildlife area designated as a Site of Special Scientific Interest.
Vale of White Horse District Council planners have agreed to the development which includes decontamination work, a contribution of £35,000 to local education facilities, and a contribution to the district council of £20,000 for fencing and landscaping.
The council's scientific department carried out extensive tests on the site and found significant levels of contamination.
The clean-up programme will include measures to prevent pollution of ground and surface water and provision for future monitoring.
The earth mound will be landscaped and built to the south of the site.
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