The former home of a historic firearms manufacturer is on its way to being redeveloped as a mixed-income residential complex.

Armed with shovels in their hands, Mayor John DeStefano Jr. and Connecticut Gov. Dannel Malloy joined a group of state and city officials Tuesday afternoon for a groundbreaking ceremony at the site of the now-closed Winchester Repeating Arms Company, a former rifle factory that lies at the corner of Winchester and Munson streets. After remaining vacant for almost 10 years, the 700,000-square-foot site just a few blocks away from Science Hill will be entirely renovated as part of a $59.26 million redevelopment project that will create new housing units and spur further economic growth in the neighborhood, according to Malloy.

“The Winchester Lofts project is transforming a vacant but historic factory building into affordable, safe housing that will yield a tenfold return in private investment and economic development and attract talented workers to the area,” Malloy said.

The renovation project is the result of what Malloy called “an effective public-private partnership” between the city of New Haven, the state and Forest City Enterprises, a Cleveland-based development firm specialized in mixed-income real estate that was selected in 2008 to turn six buildings at the site into a mix of 158 studios and one- and two-bedroom apartments.

“We think we’re going to deliver a first-class project that is going to be a great addition to the New Haven housing market,” said Abe Naparstek, who serves as vice president for East Coast development at Forest City.

Naparstek said that the renovation project will attempt to “pay homage to the historic character” of the former rifle factory.

The building, which once housed one of the first producers of repeating firearms in the nation, had sat vacant since the New Haven factory was permanently shut down in 2006, said New Haven Economic Development administrator Kelly Murphy.

She added that, because of the site’s previous function, the building had been left contaminated with metals, bullets, asbestos, lead and other toxic materials that will require expensive waste-clearing operations.

In addition to $500,000 from a “Brownfields” fund to clean up environmental and health hazards in abandoned city plots, the project will be financed through a $4 million state grant and $55 million from private investors, according to City Hall spokeswoman Anna Mariotti.

“Allocating funding for quality, mixed-income housing is a smart investment for the state — we have already seen that it creates immediate construction jobs and industry-related activity while, over time, fueling local and regional economic growth and fostering a sense of community,” Malloy said.

Naparstek said that when the redevelopment project will be completed in the summer of 2014, 80 percent of the 158 apartments will sell at market rate, while 10 percent are reserved for people who make 100 percent of area median income, or AMI. The remaining 10 percent are reserved for families who make 60 percent of AMI.

Forest City Enterprises has also signed onto two programs through the City’s Office of Economic Development to encourage women, minorities and New Haven residents to work on the project, Naparstek said. He added that roughly 25 percent of the construction workers on site will be minorities, 25 percent will be Elm City residents and 7 percent women.

With a 5 percent population increase in 2012, New Haven is experiencing “one of the fastest urban population growth rates in New England,” Murphy said, adding that projects like the renovation of the former Winchester Repeating Arms Company will stimulate economic and social development.

“New Haven is becoming more attractive to developers,” Murphy said. “[Projects like this] really speak to the strength of New Haven as place where people want to work, live and invest.”

Since taking office in January 2011, Malloy has committed more than $360 million to affordable housing projects for seniors, young professionals, working families and other residents.