Seddon Homes has been granted planning permission for the redevelopment of the former Dorma textile factory site near the town centre.
The five-acre site will be redeveloped to provide 86 two, three and four-bed homes and six apartments on Casterton Avenue.
Indigo Planning advised Seddon Homes. Kate McClean, associate at Indigo Planning, said: "Consent was originally secured in early 2008 but the economic downturn affected the viability of the original plans.
"Since then Seddon Homes and its team has worked closely with Burnley Council to reconfigure the scheme so it can become a workable development again.
"This decision means that Seddon Homes can get on with regenerating this brownfield site and providing more family homes in Burnley."
Construction is due to start in the next few months.
The architect for the development is DG Lever Associates.