The scheme will include John Lewis and Marks and Spencer stores as well as the new football ground. The developer is Oakgate (Monks Cross).
Rugby league club York City Knights will also use the planned 6,000-seat community stadium.
City centre traders had opposed the scheme for Monks Cross claiming it would affect their business.
The planning committee meeting voted 11-4 in favour of the scheme, after a meeting attended by more than 200 people.
The Labour-run council's planning committee was told the project, which includes a 100,000 sq ft (9,290 sq m) John Lewis store and a 120,000 sq ft (11,150 sq m) Marks and Spencer shop, was essential for the survival of the football club.
York City will secure promotion to the Football League if they beat Luton Town in Wembley's Football Conference play-off final on Sunday.