The proposed Jockey Club development will create new grandstand alongside the existing main grandstand, replacing the 1920s A&R block.
Work will now start immediately after next year’s Cheltenham Festival with a planned completion date ahead of the 2016 festival. Races will continue to be staged as normal during construction.
Ian Renton, Cheltenham and southwest regional director for Jockey Club Racecourses, said: "I am delighted that Cheltenham Borough Council has approved the application and am most grateful for the very positive support received from the local community. The new development will enable us to provide facilities for our racegoers in keeping with the quality of the National Hunt Racing on offer at Cheltenham and ensure that Cheltenham Racecourse enhances its status as a world-class sports venue for many years to come."