Some 2,500 proposed new homes in Gainsborough, Lincolnshire, have been given outline planning permission by West Lindsey District Council.
Thonock and Somerby Estates' plans would see the creation of a new neighbourhood to the south of the town, incorporating new infrastructure.
The plans will have to be approved by secretary of state Eric Pickles.
It is the first of three developments planned for Gainsborough, with housing projects to the north and east also proposed in future growth phases, involving 18,000 homes being constructed in total.
Jeff Summers, chairman of the council's economic development and regeneration committee, said the development would provide around 1,500 jobs in the construction phase, and help regenerate the town centre.