Egypt's government will begin next week demolishing homes vacated by residents in the lower-income area in central Cairo known as the Maspero Triangle to make way for a project to develop the area into an investment and residential hub, the housing ministry said in a statement on Tuesday.

The government has for years been planning to vacate the area, which neighbours deluxe shopping malls and five-star hotels along the Nile Corniche. However, the evacuation had been met with defiance from residents, many of whom had lived or worked there for decades.

The housing ministry's statement came after a meeting between Minister of housing Mostafa Madbouly and Cairo governor Atef Abdel-Hamid.

Over 900 out of 4,500 families residing in the area have received compensation and already vacated their homes, the Cairo governor was quoted as saying in the statement.

The government has listed five methods of compensation for locals in return for their homes, which will be replaced with commercial and residential buildings over three years.

Most of the families would not be able to afford to rent or buy in the area after it is developed, so most have opted for a one-time financial compensation between EGP 100,000 and EGP 280,000 for their residence. Others have agreed to relocate to El-Asmarat neighbourhood in Mokattam district.

The governor said that out of the 900 families, more than 550 have received financial compensation and the rest have been relocated to Mokattam.

The Maspero Triangle, located in the old Boulaq neighbourhood by the Nile, is also home to countless small workshops.

The area, which was given its name because of its triangle shape on the map, stands on 74 feddans (77 acres) and is home to at least 18,000 residents, according to 2014 estimates by Madd platform, an independent urban development institution.

The dispute over the area dates back some three decades, when development projects began to be proposed and Gulf Arab investors started acquiring buildings and blocks of land in the area.

The Cairo governor says the demolition will be carried out street-by-street.

However, Mahmoud Shaaban, who represents tenants in the area, says almost every street still has some occupied homes whose residents have yet to receive compensation that would allow them to vacate.

"The process of handing residents cheques is very slow; only 20 percent of those who chose compensation have received their payments," he told Ahram Online.

"How can they start demolishing when there are residents still waiting to know their fate?" he wondered.

Only 20 percent of residents chose to return to the area after development, officials say.

For those, the minister says, a contract with the Cairo governorate will be drawn up within the coming few days, under which families will receive a 12-month monthly allowance to rent a temporary home in the area of their choice.

Shop owners, meanwhile, will continue to hold their property until an agreement on a "fair compensation" is reached within the coming week, the minister added.