Planning permission has be given by secretary of state Eric Pickles for the controversial retail-led Preston Tithebarn development.
The project has been dogged with a number of setbacks including the withdrawal last year of one of its development partners, Grosvenor.
The Public Inquiry, which closed in July, also experienced a number of delays.
Mr Pickles said in making his decision that he found the proposal was “not in accordance with the development plan or national policy in terms of transportation”.
He added that there was a possibility of increased traffic congestion in Preston, as the 84,000 sq m of retail space would attract many more people to the area.
But the secretary of state added that any negatives were outweighed by the positives - such as the “significant economic, environmental and regeneration benefits”, as well as the compliance with the development plan and national policy.
The decision means plans can go ahead for the site, which will house new John Lewis and Marks & Spencer stores, and see a new bus station, cinema and 400 flats being built.
Ken Hudson, Preston City Council leader, said: “Now that we have planning permission, we can continue to work closely with our partners to decide what the next stages are.
“We all recognise that there is a lot of hard work ahead but getting planning permission is a huge boost for Tithebarn and a huge boost for Preston.”