Dublin City University (DCU) is developing accommodation for an additional 1,240 students at its Glasnevin campus.
The college plans to demolish an existing 252-bed facility where it charges rent of €5,665 for the academic year.
In its place will be "213 cluster units" that will include social spaces, a retail area and offices.
Each cluster consists of five or six individual en-suite rooms with shared living and kitchen space.
Over the period of 2014-2017, DCU has been Ireland's fastest-growing university with a 50pc increase in student numbers and it now has a student population of over 17,000.
A spokesperson for the university said: "DCU is very conscious that there is a need not just for additional student accommodation but affordable accommodation."
The existing accommodation, known as Larkfield, compromises small apartments with two bedrooms, a kitchen and bathroom.
DCU is working towards delivering the new on-campus apartments for the 2023-24 academic term.
Funding for the project will be provided via loan finance to the university.
Noel Rock, the local Fine Gael TD and newly appointed chairperson of the Oireachtas Housing Committee, said: "This is a big development that will go a long way to resolving issues of traffic and parking from students in the surrounding area. It's good news for DCU, the local area, and the students of tomorrow."