Watkin Jones Group will start on site immediately with three buildings containing, offices, health centre and flats after a unanimous planning approval from Cheshire West & Chester Council.
Development briefs for the site on Delamere Street near the Roman walls and close to the Fountains Roundabout have been floated by the local authority in Chester for many years.
Watkin Jones will now deliver a health and social care centre designed by Nightingale Associates' Rochdale studio.
The 128,880 sq ft development comprises will comprise one building of 75,180 sq ft for a health centre of four GP practices from West Cheshire Health Consortium, along with community services and associated facilities.
The second building will contain 32,220 sq ft of offices and local authority health services such as adult social care, independent living and public health.
The third block will contain 42 apartments.
The approval follows three years' consultation with English Heritage, the Conservation Area Advisory Committee, the Design Council Design Review Panel, the Civic Trust, and local residential groups.
Glyn Watkin Jones, chairman of Watkin Jones Group, said: "This has been a long drawn out and complex project on a site where the originally consented scheme had stalled in a difficult financial climate where demand for retail and private residential property had evaporated. Nightingale's team have laboured unstintingly and the resulting planning consent is testament to their skill and does them great credit."
Mark Drane, project director, Nightingale Associates, said: "After three years of design work on this sensitive site and lengthy consultation with statutory bodies and local groups this planning approval is an important milestone for this unique project in the heart of Chester. We look forward to delivering this scheme with Watkin Jones in order that the residents of Chester can benefit from enhanced access to health and social care services."
The scheme is due for completion by the end of 2013.