Fylde Council has approved BAE Systems' outline planning application for redevelopment of the former GEC land adjoining its Warton site.
The site will allow for up to 240 new homes and a new entrance to the Warton site, through a redesigned junction off Lytham Road, to ease congestion in the local area.
Andy Leahy, Warton site director, said: "We know there is a shortage of land for new housing in the Warton and Freckleton area, and we hope this development will help to reduce pressure on greenfield land around Warton and in other areas of the borough."
Site preparations will begin early in the New Year. BAE will market the land to house builders. CASS Associates and SCP Transport advised BAE.