Havering Council has awarded the contract to build a new special school in Gidea Park to Galliford Try.
Cabinet approved the contractors and the building work will now be subject to overall planning consent.
It would see a 300-place state-of-the-art school built on Balgores Field, off Balgores Lane, Gidea Park.
The new school would feature an outdoor play space, a sports hall, a stage and a therapy pool for pupils aged four to 19 years with Special Educational Needs and Disabilities (SEND).
Funding of more than £38million will come from a Department for Education grant.
The new facility will help many of the children with SEND to attend school within the borough instead of being educated outside the borough or placed in other inappropriate settings.
It will also help the Council to reduce the £3million cost in sending children to schools outside Havering.
Councillor Oscar Ford, Cabinet Member for Children and Young People, said:
“I have visited many schools across Havering and have seen the amazing work done by teachers, support staff and volunteers, in both our mainstream and special schools, to support children with special educational needs and disabilities.
“A new school for children with SEND will complement and expand on this provision and help local children and families to overcome the challenges of finding a suitable placement or having to attend a school across or outside of the borough due to limited places.
“For many it will mean no longer having to travel long distances to get to school and they will be closer to home, their family and friends and their networks.
“Finding suitable placements for children and young people is proving increasingly difficult, due to the demand for places, so a school closer to home catering for local children’s specific needs is something we are very much looking forward to delivering.”