Cheshire East Council has granted consent for Disley Tissue to build a £50m extension to its paper manufacturing plant.
The company will build a wood pulp mill capable of producing 220 tonnes a day to add to its existing 70-tonne recycled paper based mill.
The mill began by producing cotton but converted to a paper mill in 1890. A number of unused buildings will be demolished as part of the development and there will be an extension of the stock preparation area, new fibre and waste storage areas, a new paper mill building and two storeys of offices.
Cllr Harold Davenport, chairman of Cheshire East's strategic planning board, said: "This development is a significant business opportunity for both Disley Tissue and Cheshire East.
"The strategic planning board felt that this investment into pulp paper-making will diversify the current waste paper operation and help secure the future of the existing business."
Disley Tissue is currently capable of producing 24,500 tonnes of recycled tissue paper and 33,000 tonnes of de-inked pulp made from waste paper per year.
Cllr Jamie Macrae, cabinet member with responsibility for prosperity, said: "This is further evidence of the council's support for continued investment in Cheshire East, and this is strongly backed by the Government trade agency UK Trade & Investment."
Due to the proposal representing a significant departure from the development plan, the application has been referred to the National Planning Casework Unit, under the Town & Country Planning (Consultation) (England) Direction 2009. If this body agrees with the council's planning board's decision, the firm can go ahead with the development.