The £8bn deal with L&Q will include the construction of at least 12,000 genuinely affordable homes as part of the mayor’s £3.15bn affordable housing pledge from the government last November.
City Hall will also commit £400m to the scheme in order to boost affordable housing delivery and assist with land purchases and infrastructure costs.
Mr Khan said: “I welcome L&Q’s commitment and significant investment in building new and genuinely affordable homes for Londoners.
“I have been clear that fixing the housing crisis will be a marathon and not a sprint, but I am determined to lead from the front and get on with building affordable homes for Londoners to rent and buy.
“I urge other housing associations to work with us to get on and build the homes London needs.”
In addition to the new homes, L&Q also indicated its commitment to making significant investments in construction skills and training.
The association has invested more than £2bn in new homes for London over the last five years.
- Savills: London's new homes supply to fall sharply
- Sadiq Khan approves 691 new London homes
- 36% of homes with planning not built
David Montague, group chief executive of L&Q, said: "London has been L&Q's heartland for more than 50 years, and we are committed to prioritising development in the capital.
“Now, through this groundbreaking strategic partnership, we will build upon our existing pipeline and devote significant additional capacity into delivering even more new homes in the capital.
“L&Q and the [Greater London Authority] have been forging closer ties over many years to tackle London's housing crisis, and this strategic partnership takes our ambition to an exciting new level.”
The announcement was accompanied by confirmation that 100,000 Londoners now have access to the employers’ housing pledge.
Launched in January with business organisation London First, the programme offers employees help with housing costs, including access to a tenancy deposit loan scheme.
Jasmine Whitbread, chief executive of London First, added: “We have to unlock housebuilding in the capital – London’s housing crisis is fundamentally a question of supply.
“Employers are also stepping up to play their part: tenancy deposit loans or mortgage guarantees can make a real difference to young people struggling with rent or trying to get on to the housing ladder.”