Work is under way on a 10-storey development in Dalston Lane which will provide 121 homes and 3,460sqm of commercial space using 3,000 cubic metres of timber.
It is the second timber tower to be built in the area in two years after the nearby £10million nine-storey Murray Grove development was completed in March.
Made out of plywood, the Dalston Lane development is part of a new generation of timber buildings springing up across Europe, including proposals for a 35-storey in Paris and 34-storey building in Stockholm.
The wooden structures are said to last for up to 150 years and can be recycled at the end of their lifespan.
Andrew Waugh, of architects Waugh Thistleton behind the Dalston Lane scheme, which will be finished next summer, said: “The technology has come on in leaps and bounds over the past 20 years. We are talking about very solid, engineered timber.
“Cement is one of the biggest producers of greenhouse gases. More pollution comes from the production of cement than the whole of the airline industry.”
The buildings use materials including cross-laminated timber – layers of small wooden pieces glued and pressed together until boards are up to 18in thick.
The pre-fabricated panels allow construction to be much quicker and quieter than using tons of concrete.
Mr Waugh said: “When they (panels) arrive on site, they are craned from the back of a truck, put in place and screwed down with cordless screwdrivers.
“We can build a timber building in 50 per cent of the time, for the same cost, using natural resources.
“You can build a big building in the middle of a city and nobody can hear a thing, apart from the builders whistling.”
Elsewhere in Hackney both Bridport House, a £6million housing project, and the canal-side Whitmore Road scheme in Hackney used similar timber architecture in their recent construction.