LESS than five months since flooding devastated parts of the Lockyer Valley, construction has commenced on an ambitious program to relocate disaster-struck Lockyer Valley residents to higher ground adjacent to the Grantham Township.

Lockyer Valley Regional Council will give flood-devastated residents from the townships of Grantham, Murphys Creek, Postmans Ridge, Withcott and Helidon the option to move to higher ground in the new development as part of a voluntary land-swap initiative.

Deputy Premier Paul Lucas, Lockyer Valley Mayor Cr Steve Jones and Queensland Reconstruction Authority CEO Graeme Newton helped turn the first sod on the new estate on Tuesday.

"This initiative is the largest undertaking in the history of the Council and nowhere else in Australia has a local government authority assisted a disaster-struck community in this way," Cr Jones said.

The new master planned development will include town-water, sewered blocks, kerb and channel roads, footpaths and multiple parklands.

"Council took the decision early in the piece that we needed to offer a relocation package for these people to move to safe ground and do it fast," Cr Jones said.

"People have indicated to us that they love living in Grantham and want to stay in their community but they simply don't want to live in the same location as they did before the floods."

Mr Lucas said the Queensland Government assisted council by endorsing a temporary local planning instrument in just two days.

"We're doing everything we can to help Grantham recover and that includes helping council officers fast-track the usual planning processes – in this case for earthworks," Mr Lucas said.

80 lots will be offered during the first of multiple land releases at the site, with construction on Stage 1 now underway. Lots will be allocated under a formalised ballot system.

It is expected that the first of the new homes will be ready by the end of this year.

Lockyer Valley Regional Council will invest an estimated $30 – $40 million in developing the site over a number of years under the new community master plan.