The Paradise Street scheme covers a 42.5 acre (17.2 ha) site in Liverpool city centre, based around Paradise Street, Chavasse Park and Canning Place.
It also extends onto Church Street, Lord Street and Ropewalks across Hanover Street.
The scheme will create 800,000 sq ft (74,320 sq m) of retail space, making it the biggest retail development under way in Europe.
Plans include three major department stores, two of which are earmarked for John Lewis and Debenhams; two hotels; food and drink outlets; leisure uses; residential development; recording studios; offices; a meeting hall; a gallery; a bus station; and a 3,000-space car park.
Liverpool City Council chief executive David Henshaw said: 'This decision means it is full-steam ahead. This is everything that we wanted. It is a brilliant result after just four and a half years.'
The scheme, expected to be completed in 2008, will be designed as a series of separate buildings, linked by traditional streets. Henshaw said: 'We are not going to have a giant mall that will cut adrift the main shopping areas. This development will respect the existing streetscape, and blends the city's heritage with the best of new architecture.'