The musician has plans to develop a spa, a hotel and restaurant on the Astbury Hall site in Bridgnorth. Championship golfer Darren Clarke has also been signed up as a global ambassador for the 18-hole course.
Downing, a keen golfer, purchased the site in the 1980s and has since designed The Astbury, a par 71, 6,500-yard golf course.
Property group Regentsmead is providing funding for the construction of the cabin lodges and 2011 Open champion Clarke has signed on as global ambassador for the course.
Clarke has agreed a three-year deal at the facility which involves the golfer having the Astbury logo on his sleeve and golf bag. He will also attend several events at the course throughout the year.
"A while ago Chubby, my manager, met with Ken and we have been discussing this for quite some time," Clarke said.
"It is a venue, with Ken's eye for detail, which is only going to get better and better. The course is relatively new in golfing terms but I was very impressed with it."
Downing is planning for a more than 30 further units on the site of various sizes with the end goal of creating a 'Darren Clarke Village' of about 200 "high-class" cabins.
"We've got an awful lot of things in the pipeline," Downing added. "For example, we've got a fantastic spa facility which is being worked on at the moment. It's going to quite possibly be the biggest, best and most futuristic in the country.
"The aspirations are for The Astbury to become a destination not just nationally but internationally as well, so it's all about 'watch this space'."