The total investment is around 40 million euros.
The state will offer public land up for concessions of up to 75 years, and private companies can opt to build and rent social housing
It is as yet unclear how this will work in practice, but in principle it is an excellent idea.
The approval confirms a previous announcement about a plan for properties for rent.
"Spain's solid economic recovery has heavily favoured corporations and the wealthy, but never restored social protections."
Fifty-nine social housing properties, for which prices had been fixed, have gone on the free market since last year.
The Partido Popular say that tourist tax spending decisions had been "steamrollered" by the government.
Almost half of the properties are being let out illegally, often as holiday rentals.
Social housing schemes in Calvia, Inca and Palma will receive 43% of revenue for new projects in Majorca.
Included in the plans is a 46.5 hectare public park as part of the Magalluf Marina project.