Asbestos has been found in an empty field in Waddington where there are plans to build 53 affordable homes.
Lindum and Longhurst Group are working on the plans and, if approved, the development would be built on a section of land between a flood plain and existing homes on Brant Road.
Concerned residents have seen specialists out taking samples and marking areas out for further testing over the last week.
The small amount of asbestos has been on the site for a long time.
However, Lindum said the existing contamination does not pose any risks to residents and anything found will be safely removed.
It will not have any impact on the timescales of the project.
Simon Ormerod, who lives next to the development area, told The Lincolnite: “I’m nervous that asbestos has been discovered on this potential development within the Lincoln Green Wedge.
“Moving tons of earth so close to my property doesn’t fill me with confidence, especially as some asbestos is particularly dangerous.”
Another worried local resident, who wished to remain anonymous, said: “I have to say it’s worrying to think there could be asbestos behind my property as it’s a dangerous product and has to be handled with extreme care.
“I don’t know for definite that is the case. If it turns out there is, what will they do about it? It’s a concern as it’s so close to my property. I guess it’s early days yet regarding what they find in the soil samples.”
Graham Daubney, Lindum development manager, said: “Our ground investigation work revealed tiny fragments of asbestos which were left behind following the previous demolition of a small farm outbuilding.
“This week we have been checking the area in its vicinity as part of our usual site due diligence process.
“The existing contamination does not pose any risk to residents but anything we find will be safely removed as a matter of course.
“Lindum and Longhurst are still in the process of drawing up a planning application, which we anticipate will be ready for submission by the end of March.”
Before a formal planning application to North Kesteven District Council, Lindum and Longhurst group want the opinions from people in the local area.
Lindum and Longhurst Group hope to submit the planning application by the end of March.
If approved, the scheme would also include public open space with a play area, as well as extensive landscaping to help blend the development into the existing surroundings.