The planning application to build a £10.1m University Technical College by Visions Learning Trust in Victoria Mill has been approved by Burnley Council.
The college for 14 to 19-year-olds will combine traditional education programmes with employer-led technical training, including apprenticeships to address the local skills gap in engineering, advanced manufacturing and construction industries.
Steve Gray, chief executive of Training 2000, lead sponsors of Visions Learning Trust, said: "Having the planning application approved means we can now make our dream of establishing Pennine Lancashire's first UTC a reality and I'm delighted we are able to get underway with the construction.
"The UTC offers an alternative to traditional education routes and will engage young people through hands-on, vocational learning that will give them a real flavour of what life is like in the world of work."
The UTC is being delivered by contractor Barnfield Construction with architects Capita Symonds.
Mike Cook, director of economic regeneration at Burnley Council, added: "After a lot of hard work, the innovative and exciting UTC development has now secured planning permission. This is a major step forward that will enable us to very shortly start the work on site.
"The vision is to make Burnley a centre of educational excellence and a regionally significant centre for advanced manufacturing, digital and creative industries. The council and all its partners, including Training 2000, are continuing to work at full speed to get the project started and I'm delighted to see progress for the UTC moving forward."
The facility will be fully operational by September 2013.