DUBLIN City Council was forced to halt construction work on 124 new homes after pyrite was discovered as the project was nearing completion.
Repair works will begin in April at the Sillogue 4 development in Ballymun -- three years after the problem first emerged.
Pyrite, known as 'fool's gold', is a mineral which expands in the presence of moisture and oxygen and causes cracks in buildings. Hundreds of homes in private developments in north Dublin have been affected by the mineral and require extensive works to make the houses safe.
The auditor said the Ballymun development was 85pc complete when the problem emerged.
"One section of the redevelopment, consisting of the construction of 124 new dwellings, has recently been suspended due to the discovery of pyrite," the auditor said. "Extensive remedial works will now be required."
The council confirmed that works were needed, but that work would not begin until April.
The question of who was legally responsible for the problem would be determined "at a later date".
A detailed report on the pyrite-affected scheme has been submitted to the Department of the Environment. The houses form part of the multibillion-euro Ballymun regeneration project.
The audit report shows that the city council spent €63m on the project in 2009. The total cost of the project to date is €808m.