The fund has been launched by the Department for Communities & Local Government in partnership with the One Public Estate programme run by the Cabinet Office and the Local Government Association (LGA), which is separately offering £9m to councils to deliver programmes to make better use of publicly owned land and buildings.
Ministers hope to unlock enough council-owned land for at least 160,000 homes to be built by 2020.
Minister for government resilience and efficiency Caroline Nokes said: “One Public Estate is enabling local authorities to make better use of their land and property and deliver tangible benefits to their communities.
"I am delighted that this new funding round will enable even more councils to deliver the homes, jobs and services that local people need.”
LGA chair Lord Porter said: “Councils are committed to building the new homes their communities need and I’m pleased to see the announcement of the land release fund as part of this next funding round.
“It’s great to see two government programmes aligning to offer a more coherent programme to our local communities.”