Work to flatten buildings in Chervil Rise is expected to start after contractors DSM Demolition finish preparing the Heath Town site.
It will pave the way for a multi-million pound development, bringing 'major changes' to the area as more than 300 new homes are built, Wolverhampton council said.
Deputy leader Councillor Peter Bilson, who is also cabinet member for city assets and housing, said: "This is a big step forward towards achieving the delivery of new homes on the Heath Town estate, the majority which will be houses with gardens.
"The council has been developing plans for the regeneration of the estate, including investing in improvement of the existing homes and blocks and improving play, leisure and car parking provision."
The seven-month programme will include removal of garages, a disused underground car park, 36 maisonettes and other vacant buildings - with work expected until next August.
The contract, awarded to Birmingham-based DSM Demolition by the council, is worth £941,367.55.