Liverpool City Council has granted planning permission for Grosvenor and Henderson Global Investors' plans to regenerate the city's retail core around Paradise Street.
The move follows the decision by Deputy Prime Minister John Prescott to reject a rival scheme by the Walton Group and Capital Shopping Centres for the Chavasse Park site.
The£700 million scheme covers 16 ha of the city centre and the development will incorporate 92,900 sq m of new shops, including two department stores and integrated leisure facilities, as well as more than 300 residential units.
The western quarter of the development focuses on a new public park framed by a landmark hotel, plus interchange and pavilions with dramatic views onto the Albert Dock.
The Grosvenor-Henderson consortium was originally selected by the council and the regeneration agency, Liverpool Vision, in 2000.
Because of its size, the planning consent is still subject to ratification by the Government, but it is broadly in line with its planning policy.
The scheme has been masterplanned by architects BDP. Construction will be phased over several years, with completion set for 2008.