Moving employed people into privately-owned homes in a welfare-dependent public housing estate in southwest Sydney will transform and improve the safety of the area, the NSW government says.

A total of 200 blocks of vacant land at Claymore will be sold off and $6 million spent to improve public housing in the area as part of the revitalisation project, community services minister Pru Goward said.

Money earned from the sales will be put into the public housing system.

“In the 1960s and 1970s when estates like Claymore were built, they mainly helped working families to get on their feet with a temporary, low-cost home,” she said in a statement on Saturday.

“Today, with more than 90 per cent of public housing tenants relying on welfare, we are inviting working families back in to help transform the area.”

The government is also building more roads into the Claymore estate and a new park.

Local Liberal MP Brian Doyle said the project would clean up the streets and provide affordable blocks of land for young families.

Locals will soon be able to comment and contribute to the project after a development application is lodged with Campbelltown City Council.