Groundwork is taking place at Windsor Avenue Playing Fields in Penn, where a merry-go-round, swings and spring toys are being put in.
The scheme was given the go-ahead after Wolverhampton Council received money as part of a Section 106 agreement with developers.
Such agreements are made between local authorities and developers in a bid to mitigate the impact of housing schemes on the local area.
Residents in the area where asked for their views on what the new equipment should look like during a three-week public consultation in May last year.
Councillor Paul Singh, who represents the area, said: "This refurbishment of the play equipment at the Windsor Avenue Playing Fields is long overdue, so I am delighted it is finally happening.
"Local schools and residents have been involved in shaping the plans for the new equipment, which is being funded by money received from a nearby residential development.
"Facilities such as play areas are vitally important for the health and wellbeing of our children, and I know that many families in the area will be pleased to see this new equipment being installed."
Steph Haynes, who lives in the area, said: "I am delighted to see the play equipment at Windsor Avenue being replaced with new equipment.
"This will make a huge difference to children and families in Penn. Having decent quality facilities like this is so important in making the area a family-friendly place to live. I would like to thank Councillor Singh for his help in making this happen."