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"The rezoning of the land for light industrial use will bring direct economic benefits to the claimant community who were forcibly removed from this land more than 50 years ago," mayoral committee member for human settlements Tandeka Gqada said.
The city approved the rezoning on Wednesday.
Land owners and tenants were removed from the area between 1972 and 1984 in terms of the Group Areas Act implemented by the apartheid government which forced race groups to live in separate parts of towns and cities.
Some people relocated to Atlantis and others to the Cape Flats.
"During 1998, the land was occupied by the Richmond Park informal settlers. There are now 28 families living on the land, of which nine are part of the Richmond Park Restitution Claimant Community," said Gqada.
"The Richmond Park Restitution Claimant Community comprises 401 families."
The Regional Land Claims Commission approached the City of Cape Town in 2001 on behalf of the Richmond Park Restitution Claimant Community to request the restoration of their land.
"In 2008, the Richmond Park Claimant Community partnered with a development company which agreed to contribute skills and funding for the development of a light industrial complex on the land," said Gqada.
"The developer would also provide financial compensation and allocate shares in the light industrial development to the claimants."
Claimants would own 25% of the shares in the development company and would also receive R40m in payment for leasing the land to the development company.
"Currently, the City of Cape Town, the Regional Land Claims Commission, the Richmond claimants, and the developer are negotiating with the Richmond Park informal settlers for their relocation, said Gqada.
The city had prepared a site for the current residents of Richmond Park at the Wolwerivier informal settlement.
Gqada said the families would have access to better services, such as water, sanitation, and electricity.
"Each family will be issued with a relocation kit and solar panel and light kit with a cellphone charger."
"The city will assist with the transportation of the structure materials, if required, to the new relocation area," she said.
"The Richmond Park Communal Property Association... has also made available R6 500 as a token of appreciation for their co-operation, and to assist them during the relocation process," said Gqada.
