The site, which has been dubbed The Keysite, was bought by Willmott's development division Regen. The scheme will comprise 35 town houses and 102 apartments.
Willmott Dixon said in a statement that it aims to start demolition work on the site in the autumn followed by construction of the new homes to be completed in early 2015. The company's in-house construction business, which it said builds over 1,500 homes each year, will carry out the work.
"The Keysite will provide high quality housing that will be an attractive addition to Godalming town centre, sustaining hundreds of construction jobs during the build period while attracting people to come and live in the town," said Regen CEO Andrew Telfer.
"We are very pleased to have secured this opportunity and will make sure we create a development that will enhance the town."
Waverley Borough Council granted planning permission for the 137 homes at the site last year. The site has previously been the subject of a number of refused planning applications.
"The decision to grant permission to develop the site represents an important milestone for the residents of Godalming," said Councillor Bryn Morgan in a statement at the time. "The site has been empty and derelict for some time and the prospect that it will soon be transformed into a new residential development is very exciting".
