The proposed £23.7m bypass will create a new route from the Broughton roundabout at Junction 1 of the M55 to the A6 north of the village. It will also open other local developments.
The county council will soon send out invitations to tender to selected contractors after the deadline for submitting expressions of interest passed last week.
An inquiry was held in Preston in April to consider the scheme, following objections to compulsory purchase orders (CPOs) needed for construction. The CPOs allow Lancashire County Council to buy land for the scheme and alter existing roads and accesses.
Lancashire County Council was first granted permission for the new road in 2001, being renewed in 2008 and 2013 as designs were progressed and funding sought. The proposal for the road gained a new lease of life after appearing in the county council's highways and transport masterplan for central Lancashire and subsequently being identified as a priority for funding by local transport body Transport for Lancashire.
Funding was confirmed as a result of the Preston, South Ribble and Lancashire City Deal, agreed in September 2013 by the Lancashire Enterprise Partnership, Lancashire County Council, Preston City Council, South Ribble Borough Council and the government's Homes & Communities Agency.
County councillor John Fillis, Lancashire County Council cabinet member for highways and transport, said: "I'm pleased with the planning inspector's decision which allows us to progress with this much-needed scheme. Congestion has been an issue in Broughton village for the last 40 years and traffic has continued to grow with more than 22,000 vehicles now passing through on the A6 every day. Construction of the full bypass would reduce traffic travelling through the centre of Broughton on Garstang Road by up to 90%.
"The bypass is a key scheme in our highways and transport masterplan and is vital to unlock future economic growth which would otherwise be strangled by worsening congestion."
Karl Tupling, Homes & Communities Agency, executive director northwest, said: “This news marks an important step forward for the City Deal. The construction of the Broughton Bypass is significant because by improving the capacity of the local road network it means that future phases of development at key City Deal sites, such as Whittingham Hospital, will now take place.
“The opening up of Whittingham will also directly contribute towards the construction costs of the bypass, and is further evidence of the City Deal partners commitment to creating a strong economic hub for the northwest."
Work is scheduled to start at the end of 2015 and be completed in spring 2017. This will be followed by improvements to the village of Broughton designed to discourage traffic from using the village as a through route, and improve the environment for pedestrians and cyclists.