A £200m project to create around 4,000 new homes along with shops and schools will provide "countless opportunities" for jobs, according to the Deputy First Minister.
Nicola Sturgeon has officially launched the Shawfair development, a residential and commercial quarter which will be built on the south-east outskirts of Edinburgh.
Plans for the area include building thousands of homes, around 700 of which will be affordable, two new primary schools, a secondary school and a supermarket.
The community will also have a train station which will be linked to the city centre by the under-construction Borders Rail route.
Ms Sturgeon said: "The Scottish Government is committed to doing all that we can to support infrastructure investment.
"The venture will boost local employment, create jobs, support skills development and strengthen Scotland's infrastructure.
"Shawfair is an impressive development with significant benefits to the local economy and community.
"Creating nearly 1,000 full time jobs during the construction phase and over 4,000 upon completion, this project will provide countless opportunities''
The town will sit on the south east outskirts of Edinburgh, near the Sheriffhall roundabout
Construction of the joint venture between Mactaggart and Mickel housebuilders and property developers, Buccleuch Property, is due to get under way later this year.
Andrew Mickel, Shawfair LLP, said: "Our vision is to build a new self-sufficient community supported by a vibrant town centre with public amenities such as schools and a healthcare centre, transforming the area.
"We look forward to working closely with local councillors and the community to deliver a modern town suited to the needs of the people of Edinburgh and Midlothian."
Owen Thompson, leader of Midlothian Council, said: "As a council we have been very supportive of the Shawfair vision and look forward to it becoming a reality.
"As well as housing, this development will have a considerable number of amenities and facilities which will make it a great place to live."