The plan is to name the scheme Barton Meadows after Cyril Barton, who was posthumously awarded the Victoria Cross after bravely steering his stricken Halifax bomber away from houses and pit-heads to crash in a field on March 30, 1944.
He was pulled from the wreckage alive, but died from the injuries he sustained before reaching the hospital. He was just 22.
Earlier in the night Flying Officer Barton had continued to fly to Nuremberg in the German state of Bavaria in the raid, despite having two fuel tanks punctured by two Luftwaffe night-fighters on the way there.
It was while trying to get back to base in North Yorkshire that his fuel ran out and he was forced to crash land in Ryhope.
In memory of his incredible sacrifice, house builders Bellway want to name a new development after him. This will be 60 new homes on a 12-acre site north of Burdon Lane, although plans for the development are still awaiting approval.
Oliver Wray, sales manager for Bellway Durham, said: “After we discovered the story of the incredible bravery of Cyril Barton, VC, we were honoured to be able to name our development after him.
“This amazing tale of skill and courage is well-known to one of our colleagues, Hannah Storey, a digital marketing coordinator based at our group office in Newcastle.
“Hannah’s family is from Ryhope and her grandfather lived in the village at the time of the crash-landing.
“She said her grandfather told her the story when she was a little girl and she had often seen the memorial to Cyril Barton, VC, which stands in the village.
“Bellway has its roots in the North East and we are proud of our history.”
On Remembrance Sunday 1985 a plaque honouring Cyril Barton was unveiled on Ryhope’s war memorial.