The funding will be provided by the Brownfield Land Release Fund (BLRF) - a flagship government scheme to regenerate Brownfield land, boost local economies and support people onto the property ladder.
Leader of Chorley Council Alistair Bradley said: "This will help us bring forward the proposed redevelopment of the council-owned site on Bengal Street which is currently used as a council depot.
"The redevelopment will involve demolishing existing buildings and addressing ground contamination at the site to deliver a mixed-use scheme incorporating a mix of residential, retail and leisure space.
"This is an excellent opportunity for our area, not only will it release public sector land for new housing, bringing benefits for the community, it will also support the local economy. We trust that this award recognises the great work that Chorley is undertaking to regenerate brownfield sites.”
Housing Minister Rt Hon Christopher Pincher added: “I’m delighted that Chorley is receiving £1.1 million towards new high-quality housing on Bengal Street - part of an exciting new regeneration project.
“By redeveloping previously-neglected brownfield sites we are revitalising towns and cities across our country and delivering on our commitment to level up every corner of the United Kingdom by building new homes, creating jobs and boosting local economies.”
£11 million for 23 redevelopment projects across 15 councils follows the allocation of £58 million to from the BLRF to 53 councils in October.
The funding allocated from the BRLF so far will release land for more than 6,800 homes by March 2024 and create more than 21,000 jobs in the housing and construction sectors and wider economy.