Watkin Jones is building 715 build-to-rent (BTR) apartments on the former Brains Brewery site in Cardiff Quay, next to the train station.
It is part of a wider £1bn regeneration project in the Welsh capital.
The development will also feature a public square facing onto the River Taff and 19,500 sq ft of leisure and retail space.
Central Quay is Legal & General’s third transaction with Watkin Jones in the last two years, and the largest one to date.
Mike Powell, head of BTR transactions at LGIM Real Assets, said: “We are delighted to see spades in the ground at Central Quay, delivering a unique offer of city centre living on the waterfront.
“Marking £1bn of real assets investment into Cardiff, we are proud to have played our part in the city becoming one of the UK’s leading locations to live, work and play. The provision of a further 715 build-to-rent apartments will facilitate this trajectory of growth with much needed new homes and build on the long-standing role Legal & General has played in Cardiff’s regeneration.”