Nama will partner with Johnny Ronan, a frequent and outspoken critic of the agency, to develop the landmark Irish Glass Bottle site in Dublin 4 for housing.
Ronan and his US financial backer Colony Capital will pay "north of €150m" for an 80pc stake, a well-placed source said. Nama will retain a 20pc interest and had set a minimum €125m price for the remaining stake and a partnership to develop the scheme.
Ronan was a Nama borrower after the crash, until Colony backed him financially to exit the State's bad bank. He has been a frequent critic of the agency, particularly its decision to sell loans backing a scheme to develop the giant Battersea Power Station in London that had been owned by Mr Ronan and his business partner Richard Barrett.
In 2015 evidence to the Banking Inquiry Mr Ronan said Nama had "destroyed his business".
However, Ronan Group and Colony Capital emerged as preferred bidders from a competitive auction process, seeing off US private equity house Lone Star's Quintain unit, the Hines property group developing Cherrywood further south of Dublin and Sean Mulryan's Ballymore.
Following a 30-day period before final contracts are signed, Ronan and Colony will gain an 80pc stake in Pembroke Ventures DAC, the company set up to develop the Dublin 4 site.
Dublin City Council granted planning permission last year for 3,500 homes for an expected population of 8,000 on the brownfield site of a former bottle factory just south of the mouth of the Liffey.
It overlooks the Poolbeg peninsula and Sandymount Strand and is enclosed by a GAA club and Irishtown Nature Reserve on one side, a container terminal on and waste water and incineration plants on the other. The site has been cleared and vacant since the global financial crisis but could take seven to 10 years to complete.
The development plans include new streets and public spaces, a school and transport and water services.
The new "city quarter" will be known as Poolbeg West and covers a combined area of 37 acres.
A public transport link to the city centre via an extension of the existing Luas line from The Point depot on the north of the Liffey is understood to be crucial to the success of the scheme and the pace of housing delivery.
"Today's announcement is an important milestone in our strategy for this key site," said Nama chief executive Brendan McDonagh.
"The competitive process adopted was designed to achieve best financial return in line with the requirements of the Nama Act and facilitate delivery of much needed housing for the Dublin market in time."
Nama chairman Aidan Williams said: "This transaction will facilitate the provision of new homes, schools, businesses and community facilities over time in a key location close to Dublin city centre.
"We look forward to successfully concluding this transaction and working with RGRE and Colony over the coming years to transform this brownfield site."