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Residents can get an £800 removal grant and a payment of £1,000 per bedroom if they move to smaller accommodation.
The scheme offers has been hailed as "extremely important" at a time when more than 7,000 households are stuck on the waiting list.
A meeting tonight is set to approve extending it with £20,000 of annual funding.
To date 118 tenants have applied and 40 have now moved, freeing up around 100 bedrooms.
Of those that have relocated, half of them have left Cambridge City Council properties altogether.
About 50 of the tenants left on the list are actively looking to move, according to a report going before the housing management board. Read More: