The MBTA board has approved a new proposal for a major development project near Riverside Station in Newton, moving forward with construction of hundreds of new, conveniently located housing units.

“After much discussion and a lot of work on both sides, we have come to this conclusion: The developer is proposing two phases, with the first phase being all residential, mostly on his site, partially on ours,” said Richard Henderson, chief real estate officer for the MBTA, as he presented the development proposal at a board meeting on Thursday. “Approximately 545 units, 20 to 25% of which will be affordable.”

Phase one of Mark Development’s proposed development also includes 650 MBTA parking spaces, about 530 in the parking lot and another 120 in a garage. The scaled-down proposal reserves the right to undertake additional construction in the area in phase two.

The MBTA board unanimously approved the project on Thursday.

The property currently houses the closed Indigo Hotel and 950 MBTA parking spaces.

Mark Development’s original proposal for the property adjacent to the Green Line station called for approximately one million square feet of housing, retail space and life sciences buildings, including 550 residential units and 1,970 parking spaces.

“As early as March 2023, the developer approached the board asking for relief due to economic conditions of higher interest rates and a slowdown in life sciences development that effectively made the proposed project out of reach for them,” Henderson said.

The MBTA worked with the developer to include housing and parking goals in a new plan, Henderson said. They also developed a strategy to “ensure capacity in the site plan for potential construction of additional parking and for future demand increases, and also provide flexibility and project savings for the reconstruction of the station, which is expected to occur sometime around 2034,” he added.

Phase two, if the company chooses to go ahead with it, would include office and lab space and about 100 new housing units. The MBTA would retain 650 parking spaces.

For phase one, the company faces a permitting deadline in 2026, and the company must complete construction of the surface parking lots by fall 2027. The developer will lose its rights to proceed with phase two if construction of the garage is not completed by March 31, 2034.

The board also discussed the implementation of the Income-Based Fare Reduction Program, which will go into full effect on September 4. The program provides a 50% discount on MBTA fares to low-income riders ages 18 to 64.

The program had a soft launch on August 20, said Steven Povich, senior director of fare policy and analytics.

According to Povich, the T invited “several thousand drivers from the Youth Pass program” to apply online, and 150 drivers had already registered in the first two days.